Current Report Filing (8-k)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934



Date of Report (Date of earliest event reported):	June 30, 2014

THE TIMKEN COMPANY

(Exact Name of Registrant as Specified in its Charter)

Ohio

(State or Other Jurisdiction of Incorporation)



1-1169		34-0577130
(Commission File Number)		(I.R.S. Employer Identification No.)

4500 Mt. Pleasant St., N.W., North Canton, Ohio 44720-5450

(Address of Principal Executive Offices) (Zip Code)

(330) 438-3000

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On June 30, 2014, The Timken Company (the "Company") completed the previously announced spinoff of TimkenSteel Corporation ("TimkenSteel") from the Company through a distribution of 100% of the Company's interest in TimkenSteel to holders of the Company's common shares (the "Spinoff"). On June 30, 2014, in connection with the Spinoff, the Company entered into several agreements with TimkenSteel that will govern certain relationships between the parties following the Spinoff, including the following:

•Separation and Distribution Agreement

•Tax Sharing Agreement

•Employee Matters Agreement

•Transition Services Agreement

•Trademark License Agreement

•Noncompetition Agreement

Summaries of certain terms of the agreements can be found in the section entitled "Relationship with Timken After the Spinoff" in TimkenSteel's Information Statement, filed as Exhibit 99.1 to Amendment No. 3 of TimkenSteel's Registration Statement on Form 10 (File No. 001-36313) with the Securities and Exchange Commission, and are incorporated herein by reference. Such summaries are qualified in their entirety by reference to the full text of the agreements, which are attached as exhibits hereto.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On June 30, 2014, the Company completed the Spinoff of TimkenSteel through the distribution of 100% of the outstanding common shares (approximately 45.4 million common shares) of TimkenSteel to holders of the Company’s outstanding common shares. TimkenSteel’s business consists of those activities that previously comprised the Company’s steel business. TimkenSteel is now an independent public company and its common shares trade under the symbol “TMST” on the New York Stock Exchange.

The distribution of the TimkenSteel common shares occurred by way of a pro rata dividend to the Company’s shareholders. Each of the Company’s shareholders received one TimkenSteel common share for every two common shares of the Company held at 5:00 p.m., New York City time, on the record date, June 23, 2014, and cash in lieu of any fractional TimkenSteel common shares.

A Registration Statement on Form 10 relating to the Spinoff was filed by TimkenSteel with the Securities and Exchange Commission and was declared effective on June 10, 2014.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Spinoff, on June 29, 2014, Phillip R. Cox and Diane C. Creel became directors of TimkenSteel and resigned as directors of the Company effective as of the close of business on June 29, 2014. At the time of their resignations, Mr. Cox served as a member of the Audit Committee and the Nominating and Corporate Governance Committee of the board of directors (the “Board”) of the Company and Ms. Creel served as a member of the Audit Committee and Compensation Committee of the Board.

Item 9.01. Financial Statements and Exhibits.

(b) Pro forma financial information.

The unaudited condensed pro forma consolidated balance sheet of the Company as of March 31, 2014 and the unaudited condensed pro forma consolidated statements of income of the Company for the three months ended March 31, 2014 and for the years ended December 31, 2013, 2012 and 2011 giving pro forma effect to the Spinoff are included as Exhibit 99.1 to this current report on Form 8-K and are incorporated into this Item 9.01 by reference.

(d) Exhibits.



Exhibit Number	Description
2.1*	Separation and Distribution Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
10.1	Tax Sharing Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
10.2	Employee Matters Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
10.3	Transition Services Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
10.4	Trademark License Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
10.5	Noncompetition Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company
99.1	Unaudited Pro Forma Consolidated Financial Statements of The Timken Company.

* Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		THE TIMKEN COMPANY
Date: July 3, 2014		By: /s/ William R. Burkhart
		William R. Burkhart Senior Vice President and General Counsel

Exhibit Index



Exhibit Number	Description
2.1*	Separation and Distribution Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
10.1	Tax Sharing Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
10.2	Employee Matters Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
10.3	Transition Services Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
10.4	Trademark License Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
10.5	Noncompetition Agreement, dated as of June 30, 2014, by and between TimkenSteel Corporation and The Timken Company.
99.1	Unaudited Pro Forma Consolidated Financial Statements of The Timken Company.

__________

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

BETWEEN

THE TIMKEN COMPANY

AND

TIMKENSTEEL CORPORATION

Dated June 30, 2014

Exhibit 2.1

TABLE OF CONTENTS

ARTICLE I DEFINITIONS 1


1.1	Certain Definitions 1


ARTICLE II	THE SEPARATION 15


2.1	Reorganization; Transfer of Assets and Assumption of Liabilities 15


2.2	Consents; Transfers, Assignments and Assumptions Not Effected Prior to the Distribution 16


2.3	Termination of Agreements 17


2.4	Novation of TimkenSteel Liabilities 18


2.5	Novation of Bearings Liabilities 19


2.6	Capital Contribution 19


2.7	Timken Credit Facilities 20


2.8	Disclaimer of Representations and Warranties 20


ARTICLE III	THE DISTRIBUTION 21


3.1	Actions Prior to the Distribution 21


3.2	Conditions to Distribution 22


3.3	The Distribution 23


3.4	Fractional Shares 24


3.5	Sole Discretion of the Timken Board 24

ARTICLE IV FURTHER ASSURANCES; ADDITIONAL INFORMATION 24


4.1	Further Assurances 24


4.2	Certain Shared Contracts 25


4.3	Misdirected Customer Payments and Deductions; Other Receivables Matters 26


4.4	Insurance Matters 27


ARTICLE V	RELEASE; INDEMNIFICATION; AND GUARANTEES 28


5.1	Release of Pre‑Distribution Claims 28


5.2	Shared Liabilities 30


5.3	Indemnification by TimkenSteel 30


5.4	Indemnification by Bearings 31


5.5	Claim Procedure 31


5.6	Environmental Claim Procedures and Limitations 32


5.7	Third‑Party Claims 35


5.8	Indemnification Obligations Net of Insurance Proceeds and Other Amounts 37


5.9	Indemnification Obligations Net of Taxes 39


5.10	Remedies Cumulative; Limitations of Liability 40


5.11	Survival of Indemnities 40


ARTICLE VI	EXCHANGE OF INFORMATION; LITIGATION MANAGEMENT; CONFIDENTIALITY 40


6.1	Agreement for Exchange of Information 40


6.2	Access to Information 41


6.3	Litigation Management and Support; Production of Witnesses 41


6.4	Reimbursement 42


6.5	Retention of Records 42


6.6	Privileged Information 42


6.7	Confidentiality 44

Exhibit 2.1

TABLE OF CONTENTS


6.8	Joint Defense 44


ARTICLE VII	DISPUTE RESOLUTION 45


7.1	Dispute Process 45


7.2	Informal Dispute Resolution 45


7.3	Arbitration 46


7.4	Interim Relief 47


7.5	Remedies; Failure of a Party to Comply with Dispute Resolution Process 47


7.6	Expenses 47


7.7	Continuation of Services and Commitments 47


ARTICLE VIII	MISCELLANEOUS 48


8.1	Coordination with Ancillary Agreements; Conflicts 48


8.2	Expenses 48


8.3	Termination 48


8.4	Amendment and Modification 48


8.5	Waiver 48


8.6	Notices 49


8.7	Entire Agreement 49


8.8	No Third‑Party Beneficiaries 50


8.9	Governing Law 50


8.10	Assignment 50


8.11	Severability 50


8.12	Payment 50


8.13	Rules of Construction 51


8.14	Counterparts 51

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of June 30, 2014 (this “Agreement”), is between The Timken Company, an Ohio corporation (“Timken”), and TimkenSteel Corporation, an Ohio corporation (“TimkenSteel”). Timken and TimkenSteel are sometimes referred to herein individually as a “Party”, and collectively as the “Parties”.

RECITALS

A.Timken, acting through itself and its direct and indirect Subsidiaries, currently conducts the Steel Business and the Bearings Business.

B.The Timken Board has determined that it is in the best interests of Timken and the Timken Shareholders to separate into two publicly traded companies: (1) Timken, which will continue to conduct, directly and through its Subsidiaries, the Bearings Business, and (2) TimkenSteel, which will continue to conduct, directly and through its Subsidiaries the Steel Business.

C.To effect the Reorganization and the Distribution (each as defined herein), (1) Timken or other Bearings Entities have contributed or will contribute its interests in the TimkenSteel Assets to a member of the TimkenSteel Group, (2) TimkenSteel or another TimkenSteel Entity has assumed or will assume the TimkenSteel Liabilities, and (3) Timken or another Bearings Entity has retained or assumed, or will retain or assume, the Bearings Liabilities.

D.On the Distribution Date and subject to the terms and conditions of this Agreement, Timken will distribute to the Record Holders, on a pro rata basis, all the outstanding common shares, without par value, of TimkenSteel (“TimkenSteel Common Shares”) then owned by Timken (the “Distribution”).

E.For U.S. federal income tax purposes, it is intended that (1) the Reorganization will qualify as a reorganization within the meaning of Section 368(a) of the Code, (2) the Distribution will be tax‑free under Section 355 of the Code, (3) this Agreement will constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and (4) Timken and TimkenSteel will each be a party to the reorganization within the meaning of Section 368(b) of the Code.

In consideration of the foregoing and the mutual covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE 1
DEFINITIONS

1.1 Certain Definitions. The following terms, as used herein, have the following meanings:

Exhibit 2.1

“Action” means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any Governmental Authority or any arbitration or mediation tribunal.

“Affiliate” of a Person means a Person that controls, is controlled by, or is under common control with such Person, provided, however, that for purposes of this Agreement and the Ancillary Agreements (except as otherwise provided in any such Ancillary Agreement), none of the Bearings Entities will be deemed to be an Affiliate of any TimkenSteel Entity and none of the TimkenSteel Entities will be deemed to be an Affiliate of any Bearings Entity. For purposes of this definition, “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or other interests, by Contract or otherwise.

“Agent” means Wells Fargo Bank, N.A.

“Agreement” has the meaning set forth in the Preamble.

“Ancillary Agreements” means the Employee Matters Agreement, the Trademark License Agreement, the Supply Agreement, the Tax Sharing Agreement, the Transition Services Agreement, the Technology License Agreement, the R&D Collaboration Agreement, the Data Center Agreement, the Noncompetition Agreement and any other instruments, assignments, documents and agreements executed in connection with the implementation of the transactions contemplated by this Agreement, including the Reorganization.

“Applicable Bearings Proportion” means (a) with respect to any Shared Liability, other than any Shared Liability relating to Former Oil House Shared Liabilities, sixty‑five percent (65%); and (b) with respect to Former Oil House Shared Liabilities, fifty percent (50%).

“Applicable Proportion” means (a) as to TimkenSteel, the Applicable TimkenSteel Proportion, and (b) as to Timken, the Applicable Bearings Proportion.

“Applicable TimkenSteel Proportion” means (a) with respect to any Shared Liability, other than any Shared Liability relating to Former Oil House Shared Liabilities, thirty‑five percent (35%); and (b) with respect to Former Oil House Shared Liabilities, fifty percent (50%).

“Assets” means with respect to any Person, the assets, rights, interests, claims and properties of all kinds, real and personal, tangible, intangible and contingent, wherever located (including in the possession of suppliers, distributors, other Third Parties or elsewhere), of such Person, including rights and benefits pursuant to any Contract, permit, concession, franchise, understanding or other arrangement and any rights or benefits pursuant to any Action.

Exhibit 2.1

“Bearings Asbestos Liability” means any actual or alleged Liability (a) arising out of or attributable to actual or alleged personal injuries asserted by a Person (whether prior to or after the Distribution Date) resulting from the actual or alleged manufacture, sale or distribution of products containing asbestos in connection with the Bearings Business prior to the Distribution Date or (b) arising out of the actual or alleged exposure prior to the Distribution Date of any humans to asbestos in connection with any Bearings Asset or present at any real property owned, leased or occupied by any member of either Group (or any of their respective Predecessors) and used in connection with the operation or conduct of the Bearings Business prior to the Distribution, in the case of clauses (a) and (b), to the extent that a workers’ compensation program does not apply to such Person’s injuries, and further, in the case of clauses (a) and (b), to the extent it can be determined by a preponderance of the evidence that the actual or alleged Liability arises from the Bearings Business or Bearings Assets and is not attributable for any portion to the Steel Business or any TimkenSteel Assets.

“Bearings Assets” means any Assets owned by Timken or any of its Subsidiaries, other than any TimkenSteel Assets.

“Bearings Business” means (a) the business and operations conducted by Timken and its Subsidiaries prior to the Distribution comprising what is referred to in the Timken 10‑K as the Mobile Industries, Process Industries, and Aerospace segments; (b) any other business (other than the Steel Business) directly conducted by any member of the Bearings Group as of or prior to the Distribution; and (c) any business operation or assets that, at the time they were discontinued or sold, were not part of the Steel business as then reported in the Timken 10-K.

“Bearings Entities” means the members of the Bearings Group.

“Bearings Group” means Timken and each of its direct or indirect Subsidiaries that is not a member of the TimkenSteel Group, and each Person that is or becomes a member of the Bearings Group after the Distribution, including any Person that is or was merged into Timken or any such direct or indirect Subsidiary.

“Bearings Indemnified Parties” has the meaning set forth in Section 5.3.

“Bearings Liabilities” means:

(a) all Liabilities of Timken and the other Bearings Entities, other than any TimkenSteel Liabilities or Shared Liabilities;

(b) all Liabilities relating to, arising out of or resulting from any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Disclosure Documents relating to the Bearings Business;

Exhibit 2.1

(d) the costs and expenses allocated to Timken pursuant to Section 8.2;

(e) the Applicable Bearings Proportion of any Shared Liability;

(f) all Liabilities assumed by or allocated to any member of the Bearings Group pursuant to the Employee Matters Agreement; and

(g) all Liabilities to the extent relating to, arising out of or resulting from (except as provided in the Employee Matters Agreement):

(i) the operation or conduct of the Bearings Business as conducted at any time prior to the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such person’s authority), which act or failure to act relates to the Bearings Business);

(ii) the operation or conduct of the Bearings Business conducted by any member of the Bearings Group at any time after the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act was within such person’s authority)); and

(iii) any Bearings Asset.

For the avoidance of doubt, the Bearings Liabilities will not include any Liabilities governed by the Tax Sharing Agreement. Further, for the avoidance of doubt: (i) the designation in this Agreement of any Liability as a Bearings Liability will be binding on the Bearings Group, notwithstanding that such Liability may arise out of, directly or indirectly, the negligence, strict liability or other legal fault of any one or more TimkenSteel Entities; and (ii) except as expressly set forth in this Agreement or any Ancillary Agreement, the designation in this Agreement of Liabilities as Bearings Liabilities, Shared Liabilities or TimkenSteel Liabilities is only for purposes of allocating responsibility of such Liabilities as between the Parties and their respective Subsidiaries and will not affect any obligations to, or give rise to any rights of, any Third Parties.

“Bearings Portion” has the meaning set forth in Section 4.2.

“Bearings Receivables” has the meaning set forth in Section 4.3(a).

“Business” means the Steel Business or the Bearings Business, as the context requires.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by Law to close.

“CERCLA” has the meaning set forth in Section 5.10.

Exhibit 2.1

“Claim Notice” has the meaning set forth in Section 5.5(a).

“Claimed Amount” has the meaning set forth in Section 5.5(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” has the meaning set forth in Section 6.7(a).

“Consents” means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person.

“Contract” means any agreement, contract, commitment, instrument, undertaking, lease, license, sales order, purchase order, note, mortgage, indenture, or legally binding arrangement, whether written or oral.

“Contribution Agreement” means the Contribution, Assignment and Assumption Agreement, dated April 1, 2014, between Timken and TimkenSteel.

“Controlling Party” has the meaning set forth in Section 5.7(c)(ii).

“Damages” means all losses, claims, demands, damages, Liabilities, judgments, dues, penalties, assessments, fines (civil, criminal or administrative), costs, liens, forfeitures, settlements, fees or expenses (including reasonable attorneys’ fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending a claim or Action), of any nature or kind, whether or not the same would properly be reflected on any financial statements or the footnotes thereto.

“Data Center Agreement” means the Data Center Facilities Management Services Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“Disclosure Documents” means any registration statement (including the Form 10) filed with the SEC by or on behalf of any Party or any of its controlled Affiliates, and also includes any information statement (including the Information Statement), prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case which describes the Reorganization or the TimkenSteel Group or primarily relates to the transactions contemplated hereby.

“Dispute” has the meaning set forth in Section 7.1(a).

“Dispute Notice” has the meaning set forth in Section 7.2(a).

“Distribution” has the meaning set forth in the Recitals.

“Distribution Date” means the date, determined by the Timken Board, on which the Distribution occurs.

Exhibit 2.1

“Distribution Ratio” means the number TimkenSteel Common Shares to be distributed in respect of each Timken Common Share in the Distribution, which ratio will be determined by the Timken Board prior to the Record Date.

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“Environment” means ambient air, indoor air, surface water, groundwater, stream sediments, wetlands, soil and subsurface strata.

“Environmental Law” means any Law relating to (a) human or occupational health and safety with respect to exposure to Hazardous Materials; (b) protection of the Environment and natural resources; or (c) the generation, manufacture, processing, treatment, recycling, storage, disposal, emission, discharge, transport, distribution, labeling, handling, Release or threatened Release of any Hazardous Material.

“Environmental Liabilities” means all Liabilities (including all removal, remediation, cleanup or monitoring costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith) relating to, arising out of or resulting from any (a) actual or alleged by a Third Party (i) noncompliance with any Environmental Law, or (ii) presence, Release or threatened Release of, or exposure to, any Hazardous Material, or (b) contract, agreement, or other consensual arrangement pursuant to which Liability is assumed or imposed with respect to any of the foregoing.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“FIFO Basis” means, with respect to the payment of insurance claims pursuant to the same policy, the payment in full of each successful claim (regardless of whether a Bearings Entity or a TimkenSteel Entity is the claimant) in the order in which such successful claim is approved by the insurance carrier, until the limit of the applicable policy is met.

“Finally Determined” means, with respect to any Action or threatened Action, that the outcome or resolution of that Action or threatened Action has either (a) been decided by an arbitrator or Governmental Authority of competent jurisdiction by judgment, order, award or other ruling or (b) been settled or voluntarily dismissed and, in the case of each of clauses (a) and (b), the claimants’ rights to maintain that Action or threatened Action have been finally adjudicated, waived, discharged or extinguished, and that judgment, order, ruling, award, settlement or dismissal (whether mandatory or voluntary, but if voluntary that dismissal must be final, binding and with prejudice as to all claims specifically pleaded in that Action) is subject to no further appeal, vacatur proceeding or discretionary review.

Exhibit 2.1

“Form 10” means the registration statement on Form 10 filed by TimkenSteel with the SEC to effect the registration of TimkenSteel Common Shares pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time, including any amendment or supplement thereto.

“Former Canton Bearings Plant” means the location identified on the site plan attached to Schedule 1.1(A) as the “Former Canton Bearing Plant”.

“Former Gambrinus Bearings Plant” means the location identified on the site plan attached to Schedule 1.1(A) as the “Former Gambrinus Bearing Plant”.

“Former Oil House” means the location identified on the site plan attached to Schedule 1.1(A) as the “Former Oil House Facility”.

“Former Oil House Shared Liability” means any pre‑Distribution violations of Environmental Law or pre‑Distribution Releases of or pre‑Distribution exposure of humans to Hazardous Materials at the Former Oil House (excluding any migration of Releases of Hazardous Materials to the Former Oil House from any other TimkenSteel Asset).

“GAAP” means United States generally accepted accounting principles, consistently applied.

“Governance Committee” has the meaning set forth in Section 7.1(b).

“Governmental Authority” means any federal, state, local or foreign government (including any political or other subdivision or judicial, legislative, executive or administrative branch, agency, commission, authority or other body of any of the foregoing).

“Governmental Order” means any order, writ, judgment, injunction, decree or award entered by or with any Governmental Authority.

“Group” means the TimkenSteel Group or the Bearings Group, as the context requires.

“Hazardous Materials” means (a) any petroleum or petroleum products, radiation or radioactive materials, asbestos or asbestos‑containing materials or polychlorinated biphenyls (PCBs), and (b) any chemicals, materials, substances or wastes that are defined or characterized as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “special waste,” “toxic substances,” “pollutants,” “contaminants” or words of similar import, under any Environmental Law.

“Indemnified Party” has the meaning set forth in Section 5.5(a).

“Indemnifying Party” has the meaning set forth in Section 5.5(a).

Exhibit 2.1

“Information” means all records, books, Contracts, instruments, computer data and other data and information.

“Information Statement” means the Information Statement, attached as an exhibit to the Form 10, to be sent or otherwise made available to each Timken Shareholder in connection with the Distribution, as such Information Statement may be amended or supplemented from time to time.

“Insurance Proceeds” means those monies received by or on behalf of an insured from a Third Party insurance carrier or paid by a Third Party insurance carrier on behalf of the insured net of any self‑insured retention, deductible or other form of self‑insurance.

“Intercompany Agreement” means any Contract between or among one or more TimkenSteel Entities, on the one hand, and one or more Bearings Entities, on the other hand. Notwithstanding the foregoing, “Intercompany Agreement” will not include this Agreement, any Ancillary Agreements or any other Contract or other instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any TimkenSteel Entities and Bearings Entities that would otherwise constitute an Intercompany Agreement pursuant to this definition.

“JAMS” means Judicial Arbitration and Mediation Services, Inc.

“Law” means any statute, law, ordinance, regulation, rule, code or other requirement of a Governmental Authority or any Governmental Order.

“Liability” means any direct or indirect liability, obligation, guaranty, claim, loss, damage, deficiency, cost or expense, whether relating to payment, performance or otherwise, known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not required to be reflected or reserved against on the financial statements of the obligor under GAAP. Notwithstanding the foregoing, “Liability” will not include any Liability governed by the Tax Sharing Agreement.

“Litigation Matters” has the meaning set forth in Section 6.6(a)(ii).

“Managing Party” has the meaning set forth in Section 5.2(a).

“Mediation Period” has the meaning set forth in Section 7.2(f).

“Misdirected Bearings Deductions” has the meaning set forth in Section 4.3(a).

“Misdirected Bearings Payments” has the meaning set forth in Section 4.3(a).

“Misdirected Invoice” has the meaning set forth in Section 4.3(d).

Exhibit 2.1

“Misdirected TimkenSteel Deductions” has the meaning set forth in Section 4.3(a).

“Misdirected TimkenSteel Payments” has the meaning set forth in Section 4.3(a).

“Non‑controlling Party” has the meaning set forth in Section 5.7(c)(ii).

“Non‑Managing Party” means, as between TimkenSteel and Timken, the Party that is not the Managing Party with respect to any Shared Liability.

“Noncompetition Agreement” means the Noncompetition Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“NYSE” means the New York Stock Exchange.

“Party” has the meaning set forth in the Preamble.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

“Predecessor” means an entity whose rights, interests, assets, obligations, liabilities and duties the current entity has assumed, either through acquisition, merger or by operation of law.

“Privileged Information” has the meaning set forth in Section 6.6(a)(i).

“Record Date” means 5:00 p.m. Eastern time on the date determined by the Timken Board as the record date for determining the Timken Shareholders entitled to receive TimkenSteel Common Shares in the Distribution.

“Record Holders” means the Timken Shareholders on the Record Date.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of a Hazardous Material into the Environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials).

“Remedial Action” means any actions or measures to (i) cleanup, remove, treat, investigate, monitor, assess, evaluate, contain, or remediate Hazardous Materials in the indoor or outdoor environment; (ii) prevent the Release of Hazardous Materials so that they do not migrate, endanger, or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre‑remedial studies and investigations and post‑remedial monitoring and care; or (iv) otherwise address or respond to a Release or threatened Release of Hazardous Materials.

“Reorganization” means the transactions contemplated in the Contribution Agreement.

Exhibit 2.1

“R&D Collaboration Agreement” means the Research and Development Collaboration Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“Retained Information” has the meaning set forth in Section 6.5.

“SEC” means the Securities and Exchange Commission.

“Security Interest” means any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right‑of‑way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any other nature.

“Separation” means (a) the Reorganization, (b) any other actions to be taken pursuant to Article II and (c) any other transfers of Assets and assumptions of Liabilities, in each case, between a member of one Group and a member of the other Group, provided for in this Agreement or any Ancillary Agreement.

“Shared Asbestos Liability” means any actual or alleged Liability (a) arising out of or attributable to actual or alleged personal injuries asserted by a Person (whether prior to or after the Distribution Date) resulting from the actual or alleged manufacture, sale or distribution of products containing asbestos by any member of either Group (or any of their respective Predecessors) prior to the Distribution Date or (b) arising out of the actual or alleged exposure prior to the Distribution Date of any humans to asbestos in connection with any Bearings Asset or TimkenSteel Asset or present at any real property owned, leased or occupied by any member of either Group (or any of their respective Predecessors) prior to the Distribution, in the case of clauses (a) and (b), to the extent that a workers’ compensation program does not apply to such Person’s injuries, and further, in the case of clauses (a) and (b), only to the extent it cannot be determined by a preponderance of the evidence whether the actual or alleged Liability arises from either (i) the Steel Business or TimkenSteel Assets or (ii) the Bearings Business or Bearings Assets.

“Shared Contract” means any Contract of any member of either Group (a) that relates to both the Steel Business and the Bearings Business and (b) either (i) that the Parties specifically intended to amend or divide, modify, partially assign or replicate (in whole or in part) the respective rights and obligations under and in respect of such Contract prior to the Distribution, but were not able to do so prior to the Distribution, or (ii) the existence of which either Party discovers prior to the date that is 12 months after the Distribution and had the Parties given specific consideration to such Contract they would have amended or divided, modified, partially assigned or replicated (in whole or in part) the respective rights and obligations under and in respect of such Contract.

“Shared Liability” means any of the following:

(a) any Liability relating to, arising out of or resulting from:

Exhibit 2.1

(i) any Action by any Third Party, including any shareholder derivative action or securities class action, asserted against any member of either Group directly based on any act or omission, or alleged act or omission, taken to effect the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements, other than any item included in clause (b) of the definition of “TimkenSteel Liabilities” or clause (b) of the definition of “Bearings Liabilities”;

(ii) any shareholder derivative action or securities class action (A) brought by any current or former equity security holder of Timken and (B) arising exclusively from any acts, omissions, disclosures, or lack of disclosure occurring prior to the Distribution, irrespective of the facts alleged, including any information contained in the sections of the Information Statement set forth on Schedule 1.1(B), but excluding any item included in clause (b) of the definition of “TimkenSteel Liabilities” or clause (b) of the definition of “Bearings Liabilities”; and

(iii) any Action by any Third Party with respect to any Split Plan (as defined in the Employee Matters Agreement) (A) that arises from an act, omission, or event that occurred prior to the Distribution, (B) that is not otherwise TimkenSteel Litigation or litigation that is readily attributable to a Bearings Entity, and (C) the Liability of which cannot be readily attributed to Bearings Employees, TimkenSteel Employees, Former TimkenSteel Business Employees and/or Former Bearings Business Employees (each as defined in the Employee Matters Agreement);

(b) any Shared Asbestos Liability; and

For the avoidance of doubt, Shared Liabilities will not include any Liabilities governed by the Tax Sharing Agreement. Further, for the avoidance of doubt, except as expressly set forth in this Agreement or any Ancillary Agreement, the designation in this Agreement of Liabilities as Bearings Liabilities, Shared Liabilities or TimkenSteel Liabilities is only for purposes of allocating responsibility of such Liabilities as between the Parties and their respective Subsidiaries and will not affect any obligations to, or give rise to any rights of, any Third Parties.

“Steel Business” means (a) the business and operations conducted by Timken and its Subsidiaries prior to the Distribution comprising what is referred to in the Timken 10‑K as the Steel segment; (b) any other business directly conducted by any member of the TimkenSteel Group primarily through the use of TimkenSteel Assets as of or prior to the date of the Distribution; and (c) any business operation or assets that, at the time they were discontinued or sold, were part of the Steel business as then reported in the Timken 10-K.

Exhibit 2.1

ownership, a majority of the equity interests in such other Person), or (b) of which the first Person otherwise has the power to direct the management and policies. A Subsidiary may be owned directly or indirectly by such first Person or by another Subsidiary of such first Person.

“Supply Agreement” means the Supply Agreement, dated as of the date of this Agreement, between the TimkenSteel Entities and the Bearings Entities named therein, as may be amended or modified from time to time.

“Tax” has the meaning set forth in the Tax Sharing Agreement.

“Tax Advisor” means Covington & Burling LLP.

“Tax Benefits” has the meaning set forth in Section 5.9.

“Tax Sharing Agreement” means the Tax Sharing Agreement, dated as of the date of this Agreement between TimkenSteel and Timken, as may be amended or modified from time to time.

“Third Party” has the meaning set forth in Section 5.7(a).

“Third Party Former Bearings Plant Purchaser” has the meaning set forth in Section 5.6(e).

“Third‑Party Claim” has the meaning set forth in Section 5.7(a).

“Timken” has the meaning set forth in the Preamble.

“Timken 10‑K” means any Timken Annual Report on Form 10‑K, including for the fiscal year ended December 31, 2013, and all prior fiscal years.

“Timken Accounts Receivable Facility” means the Amended and Restated Receivables Purchase Agreement, dated as of November 30, 2012, by and among: Timken Receivables Corporation; The Timken Corporation; the purchasers from time to time parties thereto; SunTrust Bank and the Bank of Tokyo‑Mitsubishi UFJ, Ltd., New York Branch.

“Timken Board” means the board of directors of Timken or an authorized committee thereof.

“Timken Common Shares” means the common stock, without par value, of Timken.

“Timken Credit Facilities” means the (i) Second Amended and Restated Credit Agreement, dated as of May 11, 2011, by and among: The Timken Company together with certain of its Subsidiaries as Guarantors; Bank of America, N.A. and KeyBank National Association as Co‑Administrative Agents; KeyBank National Association as

Exhibit 2.1

Paying Agent, L/C Issuer and Swing Line Lender; and the other lenders party thereto and (ii) the Timken Accounts Receivable Facility.

“Timken Retained Steel Receivables” means any accounts receivable (and related security and collections thereon) relating to the Steel Business that were originated by Timken or any of its direct or indirect Subsidiaries prior to May 1, 2014 and were retained by Timken or another Bearings Entity and not included in the TimkenSteel Receivables.

“Timken Shareholders” means the shareholders of Timken.

“TimkenSteel” has the meaning set forth in the Preamble.

“TimkenSteel Asbestos Liability” means any actual or alleged Liability (a) arising out of or attributable to actual or alleged personal injuries asserted by a Person (whether prior to or after the Distribution Date) resulting from the actual or alleged manufacture, sale or distribution of products containing asbestos in connection with the Steel Business prior to the Distribution Date or (b) arising out of the actual or alleged exposure prior to the Distribution Date of any humans to asbestos in connection with any TimkenSteel Asset or present at any real property owned, leased or occupied by any member of either Group (or any of their respective Predecessors) and used in connection with the operation or conduct of the Steel Business prior to the Distribution, in the case of clauses (a) and (b), to the extent that a workers’ compensation program does not apply to such Person’s injuries, and further, in the case of clauses (a) and (b), to the extent it can be determined by a preponderance of the evidence that the actual or alleged Liability arises from the Steel Business or TimkenSteel Assets and is not attributable for any portion to the Bearings Business or any Bearings Assets. Without limiting the generality of the foregoing, “TimkenSteel Asbestos Liabilities” include those matters set forth on Schedule 1.1(C).

“TimkenSteel Assets” means, collectively, the Assets set forth on Schedule 1.1(D).

“TimkenSteel Balance Sheet” means the unaudited pro forma consolidated balance sheet of TimkenSteel, including the notes thereto, as of June 30, 2014.

“TimkenSteel Common Shares” has the meaning set forth in the Recitals.

“TimkenSteel Entities” means the members of the TimkenSteel Group.

“TimkenSteel Group” means TimkenSteel and each Person that will be a direct or indirect Subsidiary of TimkenSteel immediately prior to the Distribution (but after giving effect to the Reorganization), including the entities set forth on Schedule 1.1(E), and each Person that is or becomes a member of the TimkenSteel Group after the Distribution, including in all circumstances any Person that is or was merged into TimkenSteel or any such direct or indirect Subsidiary of TimkenSteel.

Exhibit 2.1

“TimkenSteel Indemnified Parties” has the meaning set forth in Section 5.4.

“TimkenSteel Liabilities” means:

(a) all Liabilities of TimkenSteel and the other TimkenSteel Entities;

(d) the costs and expenses allocated to TimkenSteel pursuant to Section 8.2;

(e) the Applicable TimkenSteel Proportion of any Shared Liability;

(f) all Liabilities assumed by or allocated to any member of the TimkenSteel Group pursuant to the Employee Matters Agreement;

(g) all Liabilities relating to, arising out of or resulting from any TimkenSteel Litigation;

(h) all Liabilities to the extent relating to, arising out of or resulting from (except as provided in the Employee Matters Agreement):

(i) the operation or conduct of the Steel Business as conducted at any time prior to the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such person’s authority), which act or failure to act relates to the Steel Business);

(ii) the operation or conduct of the Steel Business conducted by any member of the TimkenSteel Group at any time after the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act was within such person’s authority)); and

(iii) any TimkenSteel Asset;

(i) all Environmental Liabilities relating to, arising out of or resulting from:

(i) any TimkenSteel Asset, including any such real property interests;

(ii) the operation or conduct of the Steel Business at any time, including as related to any property to the extent formerly owned, leased or operated in connection with the Steel Business; or

Exhibit 2.1

(iii) any locations at which any Hazardous Materials generated by, from or in connection with the Steel Business or any TimkenSteel Asset have been transported for treatment, storage, disposal or recycling; and

(j) all Liabilities assumed by or allocated to any member of the TimkenSteel Group pursuant to the Contribution Agreement;

(k) all Liabilities reflected as liabilities or obligations on the TimkenSteel Balance Sheet.

For the avoidance of doubt, the TimkenSteel Liabilities will not include any Liabilities governed by the Tax Sharing Agreement. Further, for the avoidance of doubt: (i) the designation in this Agreement of any Liability as a TimkenSteel Liability will be binding on the TimkenSteel Group, notwithstanding that such Liability may arise out of, directly or indirectly, the negligence, strict liability or other legal fault of any one or more Bearings Entities; and (ii) except as expressly set forth in this Agreement or any Ancillary Agreement, the designation in this Agreement of Liabilities as Bearings Liabilities, Shared Liabilities or TimkenSteel Liabilities is only for purposes of allocating responsibility of such Liabilities as between the Parties and their respective Subsidiaries and will not affect any obligations to, or give rise to any rights of, any Third Parties.

“TimkenSteel Litigation” means the matters set forth on Schedule 1.1(F).

“TimkenSteel Portion” has the meaning set forth in Section 4.2.

“TimkenSteel Receivables” means accounts receivable relating to the Steel Business that were originated by Timken or any of its direct or indirect Subsidiaries on or after May 1, 2014.

“Trademark License Agreement” means the Trademark Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“Technology License Agreement” means the Technology Agreement, dated as of the date of this Agreement, between TimkenSteel and Timken, as may be amended or modified from time to time.

“Transition Services Agreement” means the Transition Services Agreement, dated as of the date of this Agreement between TimkenSteel and Timken, as may be amended or modified from time to time.

“Unpaid Timken Retained Steel Receivable” means any Timken Retained Steel Receivable as to which payment, or part thereof, remains unpaid as of the Distribution Date.

ARTICLE II
THE SEPARATION

Exhibit 2.1

2.1 Reorganization; Transfer of Assets and Assumption of Liabilities.

(a) Prior to the Distribution, the Parties will cause the Reorganization to be completed, and will, and will cause their respective Subsidiaries to, execute all such instruments, assignments, documents and other agreements necessary to effect the Reorganization.

(b) Prior to the Distribution, the Parties will, and will cause their respective Subsidiaries to:

(i) execute such instruments of assignment and transfer and take such other corporate actions as are necessary to (A) transfer to one or more TimkenSteel Entities all of the right, title and interest of the Bearings Group in and to all TimkenSteel Assets and (B) transfer to one or more Bearings Entities all of the right, title and interest of the TimkenSteel Group in and to all Bearings Assets; and

(ii) take all actions necessary to (A) cause one or more TimkenSteel Entities to assume all of the TimkenSteel Liabilities to the extent such TimkenSteel Liabilities would otherwise remain obligations of any member of the Bearings Group and (B) cause one or more Bearings Entities to assume all of the Bearings Liabilities to the extent such Bearings Liabilities would otherwise remain obligations of any member of the TimkenSteel Group.

2.2 Consents; Transfers, Assignments and Assumptions Not Effected Prior to the Distribution.

(a) To the extent that any of the transactions contemplated by this Agreement or any Ancillary Agreement requires Consent, the Parties will use reasonable best efforts to obtain such Consent.

(b) To the extent that any transfer or assignment of Assets or assumption of Liabilities contemplated by this Agreement or any Ancillary Agreement shall not have been consummated prior to the Distribution, the Parties will use reasonable best efforts to effect, and will use reasonable best efforts to cause the other members of their Group to effect, such transfers as soon after the Distribution as practicable.

(c) Nothing in this Agreement or any Ancillary Agreement will be deemed to require the transfer of any Assets or the assumption of any Liabilities that by their terms or operation of law cannot or should not be transferred. In the event that any such transfer of Assets or assumption of Liabilities has not been consummated, from and after the Distribution until such time as such Asset is transferred or such Liability is assumed (i) the Party retaining such Asset will thereafter hold such Asset for the use and benefit of the Party entitled to it (at the expense of the Party entitled to it, except as

Exhibit 2.1

provided in the Employee Matters Agreement) and (ii) except as provided in the Employee Matters Agreement, the Party intended to assume such Liability will, or will cause the applicable member of its Group to, pay or reimburse the Party retaining such Liability for all amounts reasonably paid or incurred in connection with the retention of such Liability. In addition, the Party retaining such Asset or Liability will, insofar as reasonably practicable and to the extent permitted by applicable Law, treat such Asset or Liability in the ordinary course of business consistent with past practice and take such other actions as may be reasonably requested by the Party entitled to such Asset or by the Party intended to assume such Liability in order to place such Party, insofar as reasonably practicable, in the same position as if such Asset or Liability had been transferred or assumed as contemplated by this Agreement or by any Ancillary Agreement and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for gain, and control over such Asset or Liability, are to inure from and after the Distribution to the member or members of the Group entitled to such Asset or intended to assume such Liability. In furtherance of the foregoing three sentences, as of the Distribution, each Party will be deemed to have acquired beneficial ownership over all of the Assets, together with all rights and privileges incident thereto, and will be deemed to have assumed all of the Liabilities, and all duties, obligations and responsibilities incident thereto, that such Party is entitled to acquire or intended to assume pursuant to the terms of this Agreement or the applicable Ancillary Agreement.

(d) If and when the applicable Consents and/or conditions referred to herein are obtained or satisfied, the transfer or assumption of the applicable Asset or Liability will be effected in accordance with and subject to the terms of this Agreement or the applicable Ancillary Agreement.

(e) Except as provided in the Employee Matters Agreement, the Party retaining any Asset or Liability due to the deferral of the transfer of such Asset or the deferral of the assumption of such Liability pursuant to Section 2.2(c) or otherwise will not be obligated, in connection with this Section 2.2, to expend any money or take any action that would require the expenditure of money unless the Party entitled to such Asset or the Party intended to assume such Liability advances the necessary funds or enters into a written agreement with the retaining Party to be responsible for such expenditure.

(f) From and after the Distribution, the Parties agree to treat, for income tax purposes, any Asset or Liability that is not transferred prior to the Distribution and is subject to the provisions of Section 2.2(c) as owned by the member of the Group to which such Asset or Liability was intended to be transferred. The Parties will not take any position inconsistent with this Section 2.2(f) unless otherwise required by applicable Law.

2.3 Termination of Agreements.

(a) Except as set forth in Section 2.3(b), the TimkenSteel Entities, on the one hand, and the Bearings Entities, on the other hand, hereby terminate any and

Exhibit 2.1

all Intercompany Agreements, effective as of the Distribution. No terminated Intercompany Agreement (including any provision thereof that purports to survive termination) will be of any further force or effect from and after the Distribution. Each Party will, at the reasonable request of any other Party, take, or cause to be taken, such other actions as may be necessary to effect the provisions of this Section 2.3(a). The Parties, on behalf of the members of their respective Group, hereby waive any advance notice provision or other termination requirements with respect to any Intercompany Agreement.

(b) The provisions of Section 2.3(a) will not apply to any of the following Intercompany Agreements (or to any of the provisions thereof):

(i) any Intercompany Agreement that this Agreement or any Ancillary Agreement expressly contemplates will survive the Distribution;

(ii) any Intercompany Agreement set forth on Schedule 2.3(b)(ii); and

(iii) any intercompany accounts payable or accounts receivable accrued as of the Distribution Date that are reflected in the books and records of the Parties or otherwise documented in writing in accordance with past practices.

(c) Except as otherwise expressly provided in this Agreement or any Ancillary Agreement, the relevant Bearings Entities and the TimkenSteel Entities will satisfy all intercompany receivables, payables, loans and other accounts between any Bearings Entity, on the one hand, and any TimkenSteel Entity, on the other hand, in existence as of immediately prior to the Distribution and after giving effect to the Reorganization no later than the Distribution by (i) forgiveness by the relevant obligee or (ii) one or a related series of repayments, distributions of and/or contributions to capital, in each case, as determined by Timken.

2.4 Novation of TimkenSteel Liabilities.

(a) Each of TimkenSteel and Timken, at the written request of the other Party within 12 months after the Distribution, will use reasonable best efforts to obtain, or to cause to be obtained, any release, Consent, substitution or amendment required to novate or assign all rights and obligations under any Contracts, Governmental Orders and other obligations or Liabilities of any nature whatsoever that constitute TimkenSteel Liabilities, or to obtain in writing the unconditional release of all Bearings Entities thereunder, so that, in any such case, TimkenSteel and the other TimkenSteel Entities will be solely responsible for such TimkenSteel Liabilities; provided, however, that the Party receiving the request will not be obligated to (i) pay any consideration or surrender, release or modify any rights or remedies therefor to any Third Party from which such releases, Consents, substitutions and amendments are requested except as expressly set forth in this Agreement or any Ancillary Agreement or (ii) take any action pursuant to this Section 2.4 to the extent such action would result in an undue burden

Exhibit 2.1

on such Party or the other members of its Group or would unreasonably interfere with any of its or such other members’ employees’ normal functions and duties.

(b) If TimkenSteel or Timken is unable to obtain, or to cause to be obtained, any required release, Consent, substitution or amendment, the applicable Bearings Entity will continue to be bound by the applicable underlying Contract, Governmental Order or other obligation or other Liability and, unless not permitted by Law or the terms thereof, TimkenSteel will, or will cause another TimkenSteel Entity to, as agent or subcontractor for such Bearings Entity, pay, perform and discharge fully all the obligations or other Liabilities of such Bearings Entity thereunder. TimkenSteel will indemnify each Bearings Indemnified Party and hold it harmless against, or will cause its applicable Subsidiary to indemnify the applicable Bearings Indemnified Party and hold it harmless against, any Liabilities arising in connection therewith. Timken will pay and remit, or cause to be paid or remitted, to the applicable TimkenSteel Entity, all money, rights and other consideration received by any Bearings Entity (net of any applicable expenses) in respect of such performance by such TimkenSteel Entity (unless any such consideration is a Bearings Asset). If and when any such release, Consent, substitution or amendment will be obtained or such Contract, Governmental Order or other rights, obligations or other Liabilities will otherwise become assignable or able to be novated, Timken will thereafter assign, or cause to be assigned, all the Bearings Entities’ rights, obligations and other Liabilities thereunder to the applicable TimkenSteel Entity without payment of any further consideration and the applicable TimkenSteel Entity will, without payment of any further consideration, assume such rights, obligations and other Liabilities.

2.5 Novation of Bearings Liabilities.

(a) Each of TimkenSteel and Timken, at the written request of the other Party within 12 months after the Distribution, will use reasonable best efforts to obtain, or to cause to be obtained, any release, Consent, substitution or amendment required to novate or assign all rights and obligations under any Contracts, Governmental Orders and other obligations or Liabilities of any nature whatsoever that constitute Bearings Liabilities, or to obtain in writing the unconditional release of all TimkenSteel Entities thereunder, so that, in any such case, Timken and the other Bearings Entities will be solely responsible for such Bearings Liabilities; provided, however, that the Party receiving the request will not be obligated to (i) pay any consideration or surrender, release or modify any rights or remedies therefor to any Third Party from which such releases, Consents, substitutions and amendments are requested except as expressly set forth in this Agreement or any Ancillary Agreement or (ii) take any action pursuant to this Section 2.5 to the extent such action would result in an undue burden on such Party or the other members of its Group or would unreasonably interfere with any of its or such other members’ employees’ normal functions and duties.

(b) If TimkenSteel or Timken is unable to obtain, or to cause to be obtained, any required release, Consent, substitution or amendment, the applicable TimkenSteel Entity will continue to be bound by the applicable underlying Contract,

Exhibit 2.1

Governmental Order or other obligation or other Liability and, unless not permitted by Law or the terms thereof, Timken will, or will cause another Bearings Entity to, as agent or subcontractor for such TimkenSteel Entity, pay, perform and discharge fully all the obligations or other Liabilities of such TimkenSteel Entity thereunder. Timken will indemnify each TimkenSteel Indemnified Party and hold it harmless against, or will cause its applicable Subsidiary to indemnify the applicable TimkenSteel Indemnified Party and hold it harmless against, any Liabilities arising in connection therewith. TimkenSteel will pay and remit, or cause to be paid or remitted, to the applicable Bearings Entity, all money, rights and other consideration received by any TimkenSteel Entity (net of any applicable expenses) in respect of such performance by such Bearings Entity (unless any such consideration is a TimkenSteel Asset). If and when any such release, Consent, substitution, approval or amendment will be obtained or such Contract, Governmental Order or other rights, obligations or other Liabilities will otherwise become assignable or able to be novated, TimkenSteel will thereafter assign, or cause to be assigned, all the TimkenSteel Entities’ rights, obligations and other Liabilities thereunder to the applicable Bearings Entity without payment of any further consideration and the applicable Bearings Entity will, without payment of any further consideration, assume such rights, obligations and other Liabilities.

2.6 Capital Contribution. From the date of this Agreement until the Distribution, except as otherwise provided in this Section 2.6, Timken will be entitled to use, retain or otherwise dispose of all cash generated by the Steel Business and the TimkenSteel Assets in accordance with the ordinary course operation of Timken’s cash management systems. Immediately prior to the Distribution, Timken will contribute to TimkenSteel an amount of cash and cash equivalents so that, as of the Distribution, the TimkenSteel Group will have, in the aggregate, an amount of cash and cash equivalents equal to $50,000,000. All cash and cash equivalents held by any member of the TimkenSteel Group as of the Distribution will be a TimkenSteel Asset and all cash and cash equivalents held by any member of the Bearings Group as of the Distribution will be a Bearings Asset.

2.7 Timken Credit Facilities. Timken will use reasonable best efforts to take or cause to be taken all actions, and enter into (or cause the Bearings Entities to enter into) such agreements and arrangements, as will be necessary to cause, as of the Distribution Date, (a) the removal of the TimkenSteel Entities from all Timken Credit Facilities and (b) the TimkenSteel Entities to be fully and unconditionally released from all Liabilities in respect of the Timken Credit Facilities. All Liabilities in respect of the Timken Credit Facilities are Bearings Liabilities and Timken will indemnify the TimkenSteel Entities from any Liabilities suffered by such TimkenSteel Entities to the extent arising out of, resulting from or relating to the Timken Credit Facilities. Without limiting the foregoing, after the Distribution Date, (i) Timken will not, and will not permit any Bearings Entity to, renew, extend, modify, amend or supplement any Timken Credit Facility in any manner that would increase, extend or give rise to any Liability of a TimkenSteel Entity under such Timken Credit Facilities and (ii) with respect to any Timken Credit Facility for which any TimkenSteel Entity was not removed and fully and unconditionally released from all Liabilities in respect of such Timken Credit Facility prior

Exhibit 2.1

to the Distribution, Timken will continue to use reasonable best efforts to cause such removal and release.

2.8 Disclaimer of Representations and Warranties. Each of Timken (on behalf of itself and each other Bearings Entity) and TimkenSteel (on behalf of itself and each other TimkenSteel Entity) understands and agrees that, except as expressly set forth in this Agreement or in any Ancillary Agreement, no Party (including its Affiliates) to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement, makes any representations or warranties relating in any way to the Assets, businesses or Liabilities transferred or assumed as contemplated hereby or thereby, to any Consent required in connection therewith, to the value or freedom from any Security Interests of, or any other matter concerning, any Assets of such Party, or to the absence of any defenses or right of setoff or freedom from counterclaim with respect to any claim or other Asset, including any accounts receivable, of any Party, or to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Asset or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth in this Agreement or in any Ancillary Agreement, (a) the Parties and the members of their respective Groups are transferring all such Assets on an “as is,” “where is” basis, (b) the Parties are expressly disclaiming any implied warranty of merchantability, fitness for a specific purpose or otherwise, (c) the respective transferees will bear the economic and legal risks that any conveyance will prove to be insufficient to vest in the transferee good and marketable title, free and clear of any Security Interest and (d) none of the Bearings Entities or the TimkenSteel Entities (including their respective Affiliates) or any other Person makes any representation or warranty about, and will not have any Liability for, the accuracy of or omissions from any information, documents or materials relating to any Assets, the Steel Business or the Bearings Business or otherwise made available in connection with the Separation or the Distribution, or the entering into of this Agreement or any Ancillary Agreement or the transactions contemplated hereby or thereby, except as expressly set forth in this Agreement or any Ancillary Agreement.

ARTICLE III
THE DISTRIBUTION

3.1 Actions Prior to the Distribution.

(g) Subject to the conditions specified in Section 3.2 and subject to Section 3.5, each of the Parties will use reasonable best efforts to consummate the Distribution. Such actions will include those specified in this Section 3.1.

(h) Prior to the Distribution, each of the Parties will execute and deliver all Ancillary Agreements to which it is intended to be a party, and will cause the other Bearings Entities and TimkenSteel Entities, as applicable, to execute and deliver any Ancillary Agreements to which such Persons are intended to be parties.

(i) Prior to the Distribution, TimkenSteel will mail the Information Statement to the Record Holders.

Exhibit 2.1

(j) TimkenSteel will prepare, file with the SEC and use reasonable best efforts to cause to become effective any registration statements or amendments thereto required to effect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the transactions contemplated by this Agreement or any of the Ancillary Agreements.

(k) Each of the Parties will take all such actions as may be necessary or appropriate under the securities or blue sky Laws of the states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution.

(l) TimkenSteel will prepare and file, and will use reasonable best efforts to have approved prior to the Distribution, an application for the listing on NYSE of the TimkenSteel Common Shares to be distributed in the Distribution, subject to official notice of listing.

(m) Prior to the Distribution, the existing directors of TimkenSteel will duly elect the individuals listed as members of the TimkenSteel board of directors in the Information Statement, and such individuals will become the members of the TimkenSteel board of directors effective as of no later than immediately prior to the Distribution; provided, however, that to the extent required by any Law or requirement of NYSE or any other national securities exchange, as applicable, one independent director will be appointed by the existing board of directors of TimkenSteel and begin his or her term prior to the Distribution in accordance with such Law or requirement.

(n) Prior to the Distribution, each individual who will be an employee of any Bearings Entity after the Distribution and who is a director or officer of any TimkenSteel Entity (other than TimkenSteel) shall have resigned or been removed from each such directorship and office held by such person, effective no later than immediately prior to the Distribution.

(o) Immediately prior to the Distribution, TimkenSteel’s Restated Articles of Incorporation and Restated Code of Regulations each in substantially the form filed as an exhibit to the Form 10, will be in effect.

(p) The Parties will, subject to Section 3.5, take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 3.2 to be satisfied and to effect the Distribution on the Distribution Date.

3.2 Conditions to Distribution. The obligations of the Parties to consummate the Distribution will be conditioned on the satisfaction, or waiver by the Timken Board, of the following conditions:

(d) The Timken Board shall, in its sole and absolute discretion, have authorized and approved the Separation and the Distribution and not withdrawn such authorization and approval.

Exhibit 2.1

(e) The Timken Board shall have declared the dividend of TimkenSteel Common Shares to the Record Holders.

(f) The SEC shall have declared the Form 10 effective under the Exchange Act, no stop order suspending the effectiveness of the Form 10 shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the SEC.

(g) The NYSE or another national securities exchange approved by the Timken Board shall have accepted the TimkenSteel Common Shares for listing, subject to official notice of issuance.

(h) The Reorganization shall have been completed.

(i) Timken shall have received an opinion from its Tax Advisor, in form and substance satisfactory to Timken in its sole and absolute discretion, that, subject to the accuracy of and compliance with certain representations, assumptions and covenants, (i) the Distribution will qualify as tax‑free to TimkenSteel, Timken and Timken Shareholders (except for cash received in lieu of fractional shares) for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) and related provisions of the Code, and (ii) the Reorganization and related restructuring transactions undertaken in connection with the Separation will be tax‑free to TimkenSteel, Timken and other members of the Timken consolidated Tax reporting group.

(j) The Timken Board shall have received an opinion from Stout Risius Ross, Inc., in form and substance reasonably satisfactory to the Timken Board, with respect to the capital adequacy and solvency of each of Timken and TimkenSteel immediately after the Distribution.

(k) No order, injunction or decree that would prevent the consummation of the Distribution shall be threatened, pending or issued (and still in effect) by any Governmental Authority of competent jurisdiction, no other legal restraint or prohibition preventing the consummation of the Distribution shall be in effect, and no other event outside the control of Timken shall have occurred or failed to occur that prevents the consummation of the Distribution.

(l) No other events or developments shall have occurred prior to the Distribution that, in the judgment of the Timken Board, would result in the Distribution having a material adverse effect on Timken or the Timken Shareholders.

(m) The actions set forth in Sections 3.1(b), (c), (g), (h) and (i) shall have been completed.

The foregoing conditions may be waived only by the Timken Board, in its sole and absolute discretion, are for the sole benefit of Timken and will not give rise to or create any duty on the part of the Timken Board to waive or not waive such

Exhibit 2.1

conditions or in any way limit the right of termination of this Agreement set forth in Section 8.3 or alter the consequences of any such termination from those specified in Section 8.3. Any determination made by the Timken Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 3.2 will be conclusive.

3.3 The Distribution.

(c) TimkenSteel will cooperate with Timken to accomplish the Distribution and will, at the direction of Timken, use reasonable best efforts to promptly take any and all actions necessary or desirable to effect the Distribution. Each of the Parties will provide, or cause the applicable member of its Group to provide, to the Agent all documents and information required to complete the Distribution.

(d) Subject to the terms and conditions set forth in this Agreement, (i) on or prior to the Distribution Date, for the benefit of and distribution to the Record Holders, Timken will deliver to the Agent all of the issued and outstanding TimkenSteel Common Shares then owned by Timken and book‑entry authorizations for such shares and (ii) on the Distribution Date, Timken will instruct the Agent to (A) distribute to each Record Holder (or such Record Holder’s bank, brokerage firm or other nominee on such Record Holder’s behalf) electronically, by direct registration in book‑entry form, the number of whole TimkenSteel Common Shares to which such Record Holder is entitled based on the Distribution Ratio and (B) receive and hold for and on behalf of each Record Holder, the number of fractional TimkenSteel Common Shares to which such Record Holder is entitled based on the Distribution Ratio. The Distribution will be effective at 5:00 p.m. Eastern time on the Distribution Date. On or as soon as practicable after the Distribution Date, the Agent will mail to each Record Holder an account statement indicating the number of whole TimkenSteel Common Shares that have been registered in book‑entry form in such Record Holder’s name.

(e) With respect to the TimkenSteel Common Shares remaining with the Agent 180 days after the Distribution Date, the Agent will deliver any such TimkenSteel Common Shares as directed by TimkenSteel, with the consent of Timken (which consent will not be unreasonably withheld, delayed or conditioned).

3.4 Fractional Shares. Timken Shareholders holding a number of Timken Common Shares, on the Record Date, which would entitle such shareholders to receive less than one whole TimkenSteel Common Share in the Distribution will receive cash in lieu of fractional shares. Fractional TimkenSteel Common Shares will not be distributed in the Distribution nor credited to book‑entry accounts. The Agent and Timken will, as soon as practicable after the Distribution Date, (a) determine the number of whole and fractional TimkenSteel Common Shares that each Record Holder is entitled to receive in the Distribution, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then‑prevailing trading prices on behalf of Record Holders to whom fractional share interests were distributed in the Distribution and (c) distribute to each such Record Holder, or for the benefit of each beneficial owner of fractional shares, such Record Holder’s or beneficial owner’s

Exhibit 2.1

ratable share of the net proceeds of such sales, based upon the average gross selling price per TimkenSteel Common Share after making appropriate deductions for any amount required to be withheld under applicable Tax Law and less any brokers’ charges, commissions or transfer Taxes. The Agent, in its sole discretion, will determine the timing and method of selling such shares, the selling price of such shares and the broker‑dealer to which such shares will be sold; provided, however, that the designated broker‑dealer is not an Affiliate of TimkenSteel or Timken. Neither Timken nor TimkenSteel will pay any interest on the proceeds from the sale of such shares.

3.5 Sole Discretion of the Timken Board. The Timken Board will, in its sole and absolute discretion, determine the Record Date, the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition, and notwithstanding anything to the contrary set forth below, the Timken Board, in its sole and absolute discretion, may at any time and from time to time until the Distribution decide to abandon the Distribution or modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution.

ARTICLE IV

FURTHER ASSURANCES; ADDITIONAL INFORMATION

4.1 Further Assurances.

(n) In addition to the actions expressly provided for elsewhere in this Agreement, each of the Parties will, and will cause its Subsidiaries to, subject to Section 3.5, use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

(o) Without limiting Section 4.1(a), prior to, on and after the Distribution Date, each Party will, and will cause its Subsidiaries to, cooperate with the other Party and its Subsidiaries, and without any further consideration, but at the expense of the requesting Party, to (i) execute and deliver, or use reasonable best efforts to cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may be reasonably requested to execute and deliver to the other Party, (ii) make, or cause to be made, all filings with, and obtain, or cause to be obtained, all Consents, approvals or authorizations of, any Governmental Authority or any other Person under any permit, Contract or other instrument, (iii) seek, obtain, or cause to be obtained, any Consents required to effect the Separation or the Distribution and (iv) take all such other actions as such Party may reasonably be requested to take by any other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in each case, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements, the transfers of the TimkenSteel Assets and the Bearings Assets, the assignment and assumption of

Exhibit 2.1

the TimkenSteel Liabilities and the Bearings Liabilities and the other transactions contemplated hereby and thereby.

(p) Without limiting Section 4.1(a), each Party will, and will cause its Subsidiaries to, at the reasonable request, cost and expense of any other Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Bearings Assets or TimkenSteel Assets, as applicable, if and to the extent it is practicable to do so.

4.2 Certain Shared Contracts. The Parties will, and will cause their respective Subsidiaries to, use reasonable best efforts to work together (and, if necessary and desirable, to work with the Third Party to such Shared Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract, such that (a) a member of the TimkenSteel Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Contract relating to the Steel Business (the “TimkenSteel Portion”), which rights will be a TimkenSteel Asset and which obligations will be a TimkenSteel Liability, and (b) a member of the Bearings Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract relating to the Bearings Business (the “Bearings Portion”), which rights will be a Bearings Asset and which obligations will be a Bearings Liability. If the Parties, or their respective Subsidiaries, as applicable, are not able to enter into an arrangement to formally divide, partially assign, modify and/or replicate such Shared Contract as contemplated by the previous sentence, then the Parties will, and will cause their respective Subsidiaries to, cooperate in any lawful arrangement to provide that a member of the TimkenSteel Group will receive the interest in the benefits and obligations of the TimkenSteel Portion under such Shared Contract and a member of the Bearings Group will receive the interest in the benefits and obligations of the Bearings Portion under such Shared Contract; provided, however, that no Party will be required to expend any money or take any action in furtherance of this Section 4.2 that would require the expenditure of money (other than any payment obligations under the applicable Shared Contract).

4.3 Misdirected Customer Payments and Deductions; Other Receivables Matters.

(c) On each Business Day during the 12‑month period following the Distribution: (i) TimkenSteel will notify Timken of (A) the amount of customer payments that relate to accounts receivable of any member of the Bearings Group (“Bearings Receivables”) received by any member of the TimkenSteel Group on the previous Business Day (such payments, “Misdirected Bearings Payments”) and (B) the amount of any customer deductions that relate to Bearings Receivables made on the previous Business Day against payments owed to any member of the TimkenSteel Group (such deductions, “Misdirected Bearings Deductions”), and (ii) Timken will notify TimkenSteel of (A) the amount of customer payments that relate to TimkenSteel Receivables received by any member of the Bearings Group on the previous Business Day (such

Exhibit 2.1

payments, “Misdirected TimkenSteel Payments”) and (B) the amount of any customer deductions that relate to TimkenSteel Receivables made on the previous Business Day against payments owed to any member of the Bearings Group (such deductions, “Misdirected TimkenSteel Deductions”). Each such notice will include the name of each applicable customer and the amount of each applicable payment and deduction.

(d) On the last day of each calendar month during such 12‑month period: (i) if the amount of Misdirected TimkenSteel Payments during such month plus the amount of Misdirected Bearings Deductions during such month exceeds the amount of Misdirected Bearings Payments during such month plus the amount of Misdirected TimkenSteel Deductions during such month, then Timken will pay TimkenSteel the amount of such difference and (ii) if the amount of Misdirected Bearings Payments during such month plus the amount Misdirected TimkenSteel Deductions during such month exceeds the amount of Misdirected TimkenSteel Payments during such month plus the amount of Misdirected Bearings Deductions during such month, then TimkenSteel will pay Timken the amount of such difference.

(e) In the event that after the 12‑month period following the Distribution, any member of the TimkenSteel Group receives a Misdirected Bearings Payment or any member of Bearings Group receives a Misdirected TimkenSteel Payment, the receiving Party will return such payment to the applicable payor.

(f) During the 12‑month period following the Distribution (or such shorter time as the Parties may agree in writing), TimkenSteel will promptly upon receipt thereof forward to Timken any invoice received by any member of the Bearings Group and addressed to any member of the Bearings Group, and Timken will promptly upon receipt thereof forward to TimkenSteel any invoice received by any member of the Bearings Group and addressed to any member of the TimkenSteel Group (any invoice described in this sentence, a “Misdirected Invoice”). After such 12‑month period (or such shorter period as the Parties may agree in writing), each of Timken and TimkenSteel will return any Misdirected Invoices received by a member of their respective Groups to the applicable vendor for correction.

(g) For a period of 120 days after the Distribution Date, Timken will, and will cause the other Bearings Entities to, use commercially reasonable efforts to collect any Unpaid Timken Retained Steel Receivables generally in accordance with the billing and collection practices presently applied by Timken in the collection of its accounts receivable. If, within 120 days after the Distribution Date, Timken (or any other Bearings Entity) receives any remittance from or on behalf of any account debtor with respect to any Unpaid Timken Retained Steel Receivable, Timken will (or will cause such other Bearings Entity to) cause such remittance to be paid to TimkenSteel or forwarded to TimkenSteel immediately upon receipt thereof.

4.4 Insurance Matters.

(a) Until the Distribution, each member of either Group will (i) cause itself and its employees, officers and directors to continue to be covered as insured

Exhibit 2.1

Parties under existing policies of insurance and (ii) permit the members of the other Group and their respective employees, officers and directors to submit claims arising from or relating to facts, circumstances, events or matters that occurred at or prior to the Distribution, to the extent permitted under such policies. Except as provided in any Ancillary Agreement, from and after the Distribution, (A) no member of either Group will have responsibility to obtain coverage for any member of the other Group, (B) each member of either Group will have the right to remove any member of the other Group and its employees, officers and directors as insured Parties under any policy of insurance issued by any insurance carrier effective immediately following the Distribution and (C) neither Party will be entitled to make any claims for insurance coverage under the other insurance policies of the members of the other Group to the extent such claims are based upon facts, circumstances, events or matters occurring after the Distribution. No member of either Group will be deemed to have made any representation or warranty as to the availability of any coverage under any such insurance policy.

(b) After the Distribution, each member of each Group and each of their respective current, former and future directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing, will have the right to assert claims arising from or relating to facts, circumstances, events or matters that occurred prior to the Distribution under any applicable insurance policies of the members of either Group to the extent permitted under the insurance policies up to the full available limits of such policies, provided that if the limits of any such policies preclude payment in full of claims filed by a member of either Group, the insurance proceeds available under such policy will be paid to the respective Groups on a FIFO Basis. Where indemnification is not available under Article V, each member of each Group will be responsible for pursuing and administering its own insurance claims and any other member of either Group will provide such reasonable cooperation as is appropriate with respect to notice of those claims and otherwise, and, with respect to those claims, in the event any member of either Group elects to pursue insurance coverage through litigation or other action against an insurer, that member will be responsible for its own costs and fees in connection therewith.

(c) If any Asset transferred pursuant to this Agreement suffers or has suffered any damage, destruction or other casualty loss that arises or has arisen prior to the Distribution and for which no insurance claim has yet been made as of the Distribution, the Party who transferred the Asset will make a claim on any available insurance and pay any such proceeds to the Party who received the Asset.

(d) Nothing in this Agreement will prohibit any member of either Group from agreeing to modify or compromise insurance rights (including by means of commutation, novation, rescission, reformation, policy buyback or otherwise) with an insurer that has been placed in liquidation, rehabilitation, conservation, supervision or similar proceedings, provided that, where those insurance rights potentially also would have benefited any member of the other Group, whether by virtue of any indemnification obligations, by virtue of any insurance rights under the policy at issue, or otherwise,

Exhibit 2.1

then TimkenSteel and Timken must both agree in advance and in writing to any modification or compromise of those insurance rights.

ARTICLE V

RELEASE; INDEMNIFICATION; AND GUARANTEES

5.1 Release of Pre‑Distribution Claims.

(f) Except (i) as provided in Section 5.1(c), (ii) as may be otherwise expressly provided in this Agreement or any Ancillary Agreement and (iii) for any matter for which any TimkenSteel Indemnified Party is entitled to indemnification pursuant to this Article V, effective as of the Distribution, TimkenSteel does hereby, for itself and each other TimkenSteel Entity and their respective Affiliates, Predecessors, successors and assigns, and, to the extent TimkenSteel legally may, all Persons that at any time prior or subsequent to the Distribution have been shareholders, directors, officers, members, agents or employees of TimkenSteel or any other TimkenSteel Entity (in each case, in their respective capacities as such), remise, release and forever discharge each Bearings Entity, their respective Affiliates, Predecessors, successors and assigns, and all Persons that at any time prior to the Distribution have been shareholders, directors, officers, members, agents or employees of Timken or any other Bearings Entity (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity, whether arising under any Contract, by operation of law or otherwise, existing or arising from or relating to any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, whether or not known as of the Distribution Date, including in connection with the transactions and all other activities to implement the Separation or the Distribution.

(g) Except (i) as provided in Section 5.1(c), (ii) as may be otherwise provided in this Agreement or any Ancillary Agreement and (iii) for any matter for which any Bearings Indemnified Party is entitled to indemnification pursuant to this Article V, effective as of the Distribution, Timken does hereby, for itself and each other Bearings Entity and their respective Affiliates, Predecessors, successors and assigns, and, to the extent Timken legally may, all Persons that at any time prior to the Distribution have been shareholders, directors, officers, members, agents or employees of Timken or any other Bearings Entity (in each case, in their respective capacities as such), remise, release and forever discharge each TimkenSteel Entity, their respective Affiliates, successors and assigns, and all Persons that at any time prior to the Distribution have been shareholders, directors, officers, members, agents or employees of TimkenSteel or any other TimkenSteel Entity (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity, whether arising under any Contract, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, whether

Exhibit 2.1

or not known as of the Distribution Date, including in connection with the transactions and all other activities to implement the Separation or the Distribution.

(h) Nothing contained in Sections 5.1(a) or 5.1(b) will impair any right of any Person to enforce this Agreement, any Ancillary Agreement, including the applicable Schedules hereto and thereto, or any arrangement that is not to terminate as of the Distribution, as specified in Section 2.3(b). In addition, nothing contained in Sections 5.1(a) or 5.1(b) will release any Person from:

(i) any Liability provided in or resulting from any Contract among any Bearings Entities and any TimkenSteel Entities that is not to terminate as of the Distribution, as specified in Section 2.3(b), or any other Liability that is not to terminate as of the Distribution, as specified in Section 2.3(b);

(ii) any Liability assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement; or

(iii) any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 5.1; provided that the Parties agree not to bring suit or permit any of their Subsidiaries to bring suit against any Person with respect to any Liability to the extent that such Person would be released with respect to such Liability by this Section 5.1 but for the provisions of this clause (iii).

(i) TimkenSteel will not make, and will not permit any other TimkenSteel Entity to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim for indemnification, against any Bearings Entity, or any other Person released pursuant to Section 5.1(a), with respect to any Liabilities released pursuant to Section 5.1(a). Timken will not, and will not permit any other Bearings Entity to, make any claim or demand, or commence any Action asserting any claim or demand, including any claim for indemnification, against any TimkenSteel Entity, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b).

(j) At any time, at the request of any other Party, each Party will cause each member of its respective Group to execute and deliver releases in form reasonably satisfactory to the other Party reflecting the provisions of this Section 5.1.

5.2 Shared Liabilities.

(h) With respect to any Shared Liability, the “Managing Party” will be the Party that is a defendant in, or otherwise directly defending, an Action with respect to a Shared Liability, except if both Parties are defendants in any such Action, the Parties will establish a joint defense in accordance with Section 6.8.

Exhibit 2.1

(i) The Managing Party will be responsible for managing, and will have the authority to manage, the defense and resolution (including, subject to Section 5.7(b)(iv), settlement) of an Action with respect to a Shared Liability. The Managing Party will, when possible under the circumstances, (i) consult the Non‑Managing Party regarding the defense strategy with respect to any such Action, (ii) before agreeing to a settlement or other voluntary final disposition thereof, advise the Non‑Managing Party of the proposed terms of such disposition, and (iii) consider in good faith any alternative terms proposed by the Non‑Managing Party. Notwithstanding the foregoing, the Non‑Managing Party will not be entitled to raise as a defense to its obligations to pay any amount in respect of any Shared Liability Action that the Non‑Managing Party was not consulted in the response to or defense thereof (except to the extent such consultation was required under this Agreement), that such Party’s views or opinions as to the conduct of such response to or defense or the reasonableness of any settlement were not accepted or adopted, that such Party does not approve of the quality or manner of the response to or defense thereof or that such Shared Liability was incurred by reason of a settlement rather than by a judgment or other determination of liability.

(j) Any proportional amount owed in respect of any Shared Liability will be remitted within 30 days after the Party entitled to such amount provides an invoice (including reasonable supporting information with respect thereto) to the Party owing such amount.

5.3 Indemnification by TimkenSteel. Subject to the provisions hereof, TimkenSteel will, and will cause any other TimkenSteel Entity (and each of their respective successors and assigns) to, jointly and severally indemnify, defend and hold harmless Timken, each member of the Bearings Group, each of their respective past and present officers, directors and employees, each of their respective successors and assigns (collectively, the “Bearings Indemnified Parties”) from and against any and all Damages incurred or suffered by the Bearings Indemnified Parties arising out of or in connection with the following, whether such Damages arise or accrue prior to, on or following the Distribution Date:

(e) the TimkenSteel Liabilities; and

(f) any breach by any TimkenSteel Entity of this Agreement, the Employee Matters Agreement or the Noncompetition Agreement.

5.4 Indemnification by Bearings. Subject to the provisions hereof, Timken will, and will cause any other Bearings Entity (and each of their respective successors and assigns) to, jointly and severally indemnify, defend and hold harmless TimkenSteel, each member of the TimkenSteel Group, each of their respective past and present officers, directors and employees, each of their respective successors and assigns (collectively, the “TimkenSteel Indemnified Parties”) from and against any and all Damages incurred or suffered by the TimkenSteel Indemnified Parties arising out of or in connection with the following, whether such Damages arise or accrue prior to, on or following the Distribution Date:

Exhibit 2.1

(a) the Bearings Liabilities;

(b) any breach by any Bearings Entity of this Agreement, the Employee Matters Agreement or the Noncompetition Agreement; and

(c) notwithstanding Section 5.3(a), any Environmental Liabilities to the extent arising from the pre‑Distribution operations or conduct of the Bearings Business at the Former Gambrinus Bearings Plant or Former Canton Bearings Plant, including such Environmental Liabilities arising from any off‑site locations at which Hazardous Materials generated by the Bearings Business at the Former Gambrinus Bearings Plant or the Former Canton Bearings Plant have been transported prior to the Distribution Date for disposal or recycling, but excluding Environmental Liabilities arising from any migration of Releases of Hazardous Materials to the Former Gambrinus Bearings Plant or Former Canton Bearings Plant from any other TimkenSteel Asset.

5.5 Claim Procedure.

(a) A Party that seeks indemnity under this Article V (an “Indemnified Party”) will give written notice (a “Claim Notice”) to the Party from whom indemnification is sought (an “Indemnifying Party”), whether the Damages sought arise from matters solely between the Parties or from Third‑Party Claims. The Claim Notice must contain (i) a description and, if known, estimated amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Party, (ii) a reasonable explanation of the basis for the Claim Notice to the extent of facts then known by the Indemnified Party, and (iii) a demand for payment of those Damages. No delay or deficiency on the part of the Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying Party of any Liability or obligation hereunder except to the extent of any Damages caused by or arising out of such delay or deficiency.

(b) Within 45 days after delivery of a Claim Notice that does not involve a Third‑Party Claim, the Indemnifying Party will deliver to the Indemnified Party a written response in which the Indemnifying Party will either: (i) agree that the Indemnified Party is entitled to receive all of the Claimed Amount and, in which case, the Indemnifying Party will pay the Claimed Amount in accordance with a payment and distribution method reasonably acceptable to the Indemnified Party; or (ii) dispute that the Indemnified Party is entitled to receive all or any portion of the Claimed Amount, in which case, the Parties will resort to the dispute resolution procedures set forth in Article VII.

(c) In the event that the Indemnifying Party disputes the Claimed Amount, as soon as practicable but in no event later than 15 days after the receipt of the notice referenced in Section 5.5(b)(ii), the Parties will begin the process to resolve the matter in accordance with the dispute resolution provisions of Article VII. Upon ultimate resolution thereof, the Parties will take such actions as are reasonably necessary to comply with such terms of resolution.

Exhibit 2.1

5.6 Environmental Claim Procedures and Limitations.

(a) With respect to any claim pursuant to Section 5.4 for Remedial Action costs incurred in relation to any Release that occurred prior to Distribution on, under or migrating from the Former Gambrinus Bearings Plant, Former Canton Bearings Plant or Former Oil House, no TimkenSteel Indemnified Parties will be entitled to recover such Damages otherwise subject to indemnification under Section 5.4 unless such Remedial Action is required under applicable Environmental Laws to attain compliance with minimum remedial standards applicable under Environmental Laws for continued industrial use of the relevant property or facility, employing where applicable risk‑based remedial standards, deed restrictions and institutional and engineering controls, where such restrictions, standards or controls would not unreasonably restrict, limit, or interfere with operations at the relevant property or facility as used and configured in the condition existing as of the Distribution Date. The TimkenSteel Indemnified Parties will reasonably cooperate with Timken to avoid and minimize Damages that would otherwise be subject to indemnification under Section 5.4(c) or otherwise under Section 5.4 (with respect to any Former Oil House Shared Liability), and will execute and file such documents as may be necessary to implement the foregoing controls and restrictions in relation to any such Remedial Action as would otherwise be subject to indemnification under Section 5.4.

(b) Furthermore, no TimkenSteel Indemnified Parties will be entitled to indemnification with respect to any Damages pursuant to Section 5.4(c), or pursuant to Section 5.4 with respect to any Former Oil House Shared Liability, to the extent:

(i) arising from any Release identified or discovered through any post‑Distribution intrusive or subsurface investigations (including drilling, boring, testing or sampling) of soil or groundwater performed by or on behalf of any TimkenSteel Indemnified Parties (or by a Person that is not Timken or a Governmental Authority that any TimkenSteel Indemnified Parties expressly allow to conduct such investigations) at the Former Gambrinus Bearings Plant, Former Canton Bearings Plant or Former Oil House unless such investigation is (A) required to comply with Environmental Laws or is reasonably necessary to defend against a Third‑Party Claim, (B) required by a legally binding order from a Governmental Authority or (C) undertaken in connection with any construction, renovation, maintenance, repair, expansion or modification of any facility, but only if conditions observed during such construction, renovation, maintenance, repair, expansion or modification activities reasonably suggest the actual presence of a greater than a de minimis Release that would reasonably and customarily require sampling to protect construction and maintenance workers;

(ii) arising from the solicitation (not otherwise required under applicable Environmental Law) by any TimkenSteel Indemnified Parties of any Governmental Authority to seek or require any Remedial Action; or

(iii) of the incremental increase in Remedial Action Damages associated with a change of the current industrial use (as the relevant facilities are used

Exhibit 2.1

and configured as of Distribution) to a use or facility configuration that is subject to more stringent cleanup standards or requires more costly Remedial Action.

(c) No Bearings Entity will have any obligation to indemnify any TimkenSteel Indemnified Parties under Section 5.4(c), or pursuant to Section 5.4 with respect to any Former Oil House Shared Liability, with respect to the portion of Damages to the extent arising from any Releases first occurring or contributed to after Distribution, and TimkenSteel will reimburse Timken for any such Damages incurred by any Bearings Entity within 30 days of written demand to do so.

(d) The TimkenSteel Indemnified Parties will promptly notify Timken in writing upon becoming aware of the need to conduct any Remedial Action that would be subject to indemnification under Section 5.4(c), or under Section 5.4 for any Former Oil House Shared Liability, and Timken will have the right, in its sole discretion, to control and conduct any such Remedial Action and any related communications with any Governmental Authorities or third parties without prejudice to any rights of Timken to seek indemnification or reimbursement with respect to any portion of Damages for which TimkenSteel is otherwise liable under this Agreement; provided that Timken will take commercially reasonable steps to avoid unreasonably interfering with operations at the relevant facility or property; and provided further that Timken will utilize environmental contractors reasonably acceptable to TimkenSteel and provide TimkenSteel with a reasonable opportunity to review and comment on any proposed Remedial Action prior to implementation and final drafts of documents prepared for submission to any Governmental Authority or other Third Party prior to submittal (and will utilize good faith reasonable efforts to accommodate any reasonable comments provided by TimkenSteel). The TimkenSteel Indemnified Parties will provide all reasonable access during normal operating hours to all of the applicable property, facilities, books and records as Timken may reasonably request to the extent necessary to complete such Remedial Action consistent with applicable Environmental Laws, including use of any wastewater treatment systems and utilities located at such property (subject to reimbursement by Timken for the reasonable pro rata costs of Timken’s usage of such systems and utilities, and provided that such use does not unreasonably interfere with TimkenSteel’s operations). Timken will use commercially reasonable efforts to restore any structures or improvements affected by such access to such property to substantially the same condition as existed prior to performance of the Remedial Action.

(e) If the Former Gambrinus Bearings Plant, Former Canton Bearings Plant or Former Oil House is sold at any time to any Third Party after the Distribution (“Third Party Former Bearings Plant Purchaser”), then no Bearings Entity will have any obligation to indemnify any TimkenSteel Indemnified Parties under Section 5.4(c), or under Section 5.4 with respect to any Former Oil House Shared Liability, to the extent any Damages arise from, or to the extent of any increase in Damages attributable to, the failure of any such Third Party Former Bearings Plant Purchaser to comply with the obligations of the TimkenSteel Indemnified Parties under this Section 5.6.

Exhibit 2.1

(f) (1) Notwithstanding anything in this Section 5.6 to the contrary, the following specific categories of outside contractor, vendor and consultant costs arising from demolition of the building structures and building pads existing as of the Distribution Date at the Former Gambrinus Bearings Plant or Former Canton Bearings Plant will be allocated between Timken and TimkenSteel as follows: (A) Timken will be responsible for 100% of such costs for removal and disposal of Hazardous Materials (including asbestos) existing prior to Distribution and contained within building structures, which removal or disposal is required by any Environmental Law prior to demolition, (B) Timken will be responsible for 75% and TimkenSteel will be responsible for 25% of such costs for (1) any increase in building structure and building pad demolition debris disposal costs required due to the presence of Hazardous Materials (existing prior to Distribution) above the cost that would be incurred to dispose of such debris at a licensed construction and demolition debris landfill, and (2) purchase and installation of two feet thickness of soil or another engineered barrier to cover removed building pad footprints, or removal and disposal of contaminated soils existing prior to Distribution beneath removed building pad footprints, whichever separately or in some combination is least expensive, in order to meet direct contact industrial standards pursuant to applicable Environmental Laws for the removed building pad footprint area, and (3) reasonable sampling as determined by Timken to be reasonably necessary to assist in the evaluation of the least expensive alternative under Section 5.6(f)(i)(B) (1) and (2).

(i) The TimkenSteel Indemnified Parties will take commercially reasonable efforts to minimize costs incurred pursuant to 5.6(f)(i), and Timken will be entitled to review and approve (such approval not to be unreasonably withheld, conditioned or delayed) all such work plans to be performed on behalf of TimkenSteel to ensure that commercially reasonable lowest cost measures are implemented, provided that Timken will have the right, in its sole discretion, to control and conduct any work and activities described in Section 5.6(f)(i) and any related communications with any Governmental Authorities or third parties without prejudice to any rights of Timken to seek indemnification or reimbursement with respect to any portion of Damages for which TimkenSteel is liable under this Agreement; and provided further that Timken will utilize contractors and consultants reasonably acceptable to TimkenSteel and provide TimkenSteel with a reasonable opportunity to review and comment on any proposed work plans prior to implementation and final drafts of documents prepared for submission to any Governmental Authority or other Third Party prior to submittal (and will utilize good faith reasonable efforts to accommodate any reasonable comments provided by TimkenSteel). The TimkenSteel Indemnified Parties will provide all reasonable access during normal operating hours to all of the applicable property, facilities, books and records as Timken may reasonably request to the extent necessary to complete such work consistent with applicable Environmental Laws, including use of any wastewater treatment systems and utilities located at such property (subject to reimbursement by Timken for the reasonable pro rata costs of Timken’s usage of such systems and utilities, and provided that such use does not unreasonably interfere with TimkenSteel’s operations).

Exhibit 2.1

(ii) Except as provided in Section 5.6(f)(i), no TimkenSteel Indemnified Parties will be entitled to indemnification with respect to any Damages pursuant to Section 5.4(c), or pursuant to Section 5.4 with respect to any Former Oil House Shared Liability, to the extent that such Damages are costs of any post-Distribution construction, demolition, renovation, maintenance, repair, expansion or modification at the Former Gambrinus Bearings Plant, Former Canton Bearings Plant or Former Oil House, including any removal or disposal of soils or debris to perform any such construction, demolition, renovation, maintenance, repair, expansion or modification, unless such removal or disposal of soils or debris would have been required by Environmental Law as the building structures and building pads were used for industrial purposes and configured in the condition existing as of the Distribution Date as set forth in 5.6(a).

(iii) For the avoidance of doubt, no TimkenSteel Indemnified Parties will be entitled to indemnification under Section 5.4(c) with respect to (A) any exposure of any humans to Hazardous Materials to the extent arising out of any demolition of the Former Gambrinus Bearings Plant or Former Canton Bearings Plant (unless such exposure was caused by work and activities for which Timken actually assumed control under Section 5.6(f)(ii)), and (B) except as provided in Section 5.6(f)(i), any Remedial Action to the extent arising out of any demolition of the Former Gambrinus Bearings Plant or Former Canton Bearings Plant unless (1) caused by work and activities for which Timken actually assumed control under Section 5.6(f)(ii) or (2) such Remedial Action would have been required by Environmental Law as the building structures and building pads were used for industrial purposes and configured in the condition existing as of the Distribution Date as set forth in Section 5.6(a).

5.7 Third‑Party Claims.

(a) In the event that the Indemnified Party receives written notice or otherwise learns of the assertion by a Person who is not a member of either Group (a “Third Party”) of any claim or the commencement of any Action (collectively, a “Third‑Party Claim”) with respect to which the Indemnifying Party may be obligated to provide indemnification under this Article V, the Indemnified Party will give written notice to the Indemnifying Party of the Third‑Party Claim. Such notification will be given within 15 Business Days after receipt by the Indemnified Party of notice of such Third‑Party Claim, will be accompanied by reasonable supporting documentation submitted by such third Person (to the extent then in the possession of the Indemnified Party) and will describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third‑Party Claim and the amount of the claimed Damages; provided, however, that no delay or deficiency on the part of the Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying Party of any Liability or obligation hereunder except to the extent of any Damages caused by or arising out of such delay or deficiency.

(b) With respect to any Third‑Party Claim that is a Shared Liability:

Exhibit 2.1

(iv) The Managing Party will assume the defense of all Third‑Party Claims that are (A) Shared Liabilities and (B) not subject to Section 6.8.

(v) A Party’s costs and expenses of assuming the defense of (subject to Section 5.7(b)(i)), and/or seeking to settle or compromise (subject to Section 5.7(b)(iv)), any Third‑Party Claim that is a Shared Liability will be included in the calculation of the amount of the applicable Shared Liability in determining the obligations of the Parties with respect thereto.

(vi) The Managing Party will consult with the Non‑Managing Party prior to taking any action with respect to any Third‑Party Claim that is a Shared Liability if the Managing Party’s action could reasonably be expected to have a significant adverse impact (financial or non‑financial) on the Non‑Managing Party, including a significant adverse impact on the rights, obligations, operations, standing or reputation of the Non‑Managing Party (or its Subsidiaries or Affiliates), and the Managing Party will not take such action without the prior written consent of the Non‑Managing Party, which consent will not be unreasonably withheld, delayed or conditioned.

(vii) The Managing Party will promptly give notice to the Non‑Managing Party regarding the substance of any settlement related discussions with respect to any Third‑Party Claim that is a Shared Liability if (A) the Non‑Managing Party is required to share in any significant aspect of the costs and expenses, proceeds or obligations resulting from such settlement or (B) the settlement can reasonably be expected to have a significant impact (financial or nonfinancial) on the Non‑Managing Party. In such instances, the Managing Party will not settle such Third‑Party Claim without the prior written consent of the Non‑Managing Party, which consent will not be unreasonably withheld, delayed or conditioned.

(viii) The Non‑Managing Party will cooperate in a reasonable manner in the defense of any Third‑Party Claim that is a Shared Liability.

(i) Within 30 calendar days after delivery of such written notice, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third‑Party Claim with counsel reasonably satisfactory to the Indemnified Party. During any period in which the Indemnifying Party has not so assumed control of such defense, the Indemnified Party will control such defense.

(ii) The Party not controlling such defense (the “Non‑controlling Party”) may participate therein at its own expense; provided, however, that if the Indemnifying Party assumes control of such defense and the Indemnified Party concludes, upon the written opinion of counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Third‑Party Claim, the reasonable fees and expenses of counsel to the Indemnified Party will be considered

Exhibit 2.1

“Damages” for purposes of this Agreement. The Party controlling such defense (the “Controlling Party”) will keep the Non‑controlling Party reasonably advised of the status of such Third‑Party Claim and the defense thereof and will consider in good faith recommendations made by the Non‑controlling Party with respect thereto. The Non‑controlling Party will furnish the Controlling Party with such Information as it may have with respect to such Third‑Party Claim (including copies of any summons, complaint or other pleading which may have been served on such Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and will otherwise cooperate with and assist the Controlling Party in the defense of such Third‑Party Claim.

(iii) The Indemnifying Party will not agree to any settlement of, or the entry of any judgment arising from, any such Third‑Party Claim without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided, however, that the consent of the Indemnified Party will not be required if (A) the Indemnifying Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment, and (B) such settlement or judgment includes a full, complete and unconditional release of the Indemnified Party from further Liability. The Indemnified Party will not agree to any settlement of, or the entry of any judgment arising from, any such Third‑Party Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld, delayed or conditioned.

(d) If it has been Finally Determined that the Indemnified Party is entitled to indemnification, the Indemnifying Party will, upon request from the Indemnified Party, promptly pay to the Indemnified Party the amount of any expense, loss or other amount subject to indemnification resulting from the Third‑Party Claim for which the Indemnifying Party’s responsibility has been so Finally Determined. If the Indemnified Party does not seek a determination pursuant to the immediately preceding sentence, then the Indemnifying Party will pay to the Indemnified Party in cash the amount, if any, for which the Indemnified Party is entitled to be indemnified under this Agreement within 30 days after such Third‑Party Claim has been Finally Determined.

(e) The Indemnified Party will use reasonable best efforts to take all necessary action to keep and maintain in force all insurance that applies to any claim for which indemnification is sought. The Indemnified Party will also use reasonable best efforts to ensure that Insurance Proceeds received with respect to claims, costs and expenses under insurance policies in force will be paid to reduce the net exposure of the Indemnified Party.

5.8 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

(a) The amount of any Damages for which indemnification is provided under this Agreement will be net of any amounts actually recovered by the Indemnified Party from any Third Party (including Insurance Proceeds actually recovered) with respect to such Damages. An Indemnifying Party will be subrogated to the rights of the

Exhibit 2.1

Indemnified Party upon payment in full of the amount of the relevant indemnifiable Damages. An insurer who would otherwise be obligated to pay any claim will not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto, in either case, solely by virtue of the indemnification provisions of this Agreement. If any Indemnified Party recovers an amount from a Third Party in respect of Damages for which indemnification is provided in this Agreement after the full amount of such indemnifiable Damages has been paid by an Indemnifying Party or after an Indemnifying Party has made partial payment of such indemnifiable Damages and the amount received from the Third Party exceeds the remaining unpaid principal balance of such indemnifiable Damages, then the Indemnified Party will promptly remit to the Indemnifying Party the excess (if any) of (i) the sum of the amount theretofore paid by such Indemnifying Party in respect of such indemnifiable Damages plus the amount received from the Third Party in respect thereof, less (ii) the full amount of such indemnifiable Damages.

(b) In the case of any Shared Liability, any Insurance Proceeds actually received, realized or recovered by any Party in respect of the Shared Liability will be shared between the TimkenSteel Group and the Bearings Group in accordance with their respective Applicable Proportions, regardless of which Group may actually receive, realize or recover such Insurance Proceeds.

(c) Notwithstanding anything to the contrary in this Article V, but subject to Section 5.8(a) above, in the event that a TimkenSteel Entity is an Indemnifying Party:

(i) The initial presumption for purposes of calculating indemnity payments will be that there is no insurance coverage for any such Damages, and the Indemnifying Party will, upon request by any Bearings Indemnified Party, re‑affirm in writing to fully indemnify, defend and hold harmless the Indemnified Party from and against any and all such Damages. Once the Indemnifying Party has re‑affirmed this obligation to the Indemnified Party in writing, the Indemnifying Party may at any time request that the Indemnified Party pursue insurance coverage from one or more insurers in connection with such Damages.

(ii) If requested, the Indemnified Party will cooperate in good faith with the Indemnifying Party and use reasonable best efforts to pursue insurance coverage, including, if necessary, the filing of coverage litigation, after consultation with the Indemnifying Party and the Indemnifying Party has provided written consent as to the initiation of coverage litigation (which consent will not be unreasonably withheld, delayed or conditioned), all of which will be at the Indemnifying Party’s sole cost and expense. The Indemnifying Party will pay directly, or promptly reimburse the Indemnified Party for, all such costs and expenses, as directed by the Indemnified Party.

(iii) The Indemnified Party will retain full and exclusive control of all such matters (including the settlement of coverage claims against insurers), and the Indemnified Party will have the right to select counsel with the concurrence of the Indemnifying Party, which concurrence will not be unreasonably withheld, delayed or conditioned.

Exhibit 2.1

(iv) The proceeds of any insurance recovery (after deducting the insurance indemnity payment for the settlement or judgment for which coverage was sought, and any costs and expenses that have not yet been paid or reimbursed by the Indemnifying Party) will be paid to the Indemnifying Party.

(v) At all times, the Indemnifying Party will cooperate with the Indemnified Party’s insurers and/or with the Indemnified Party in the pursuit of insurance coverage, as and when reasonably requested to do so by the Indemnified Party.

(vi) It is not the intent of this Section 5.8(c) to absolve the Indemnifying Party of any responsibility to the Indemnified Party for those Damages in connection with which the Indemnified Party actually secures insurance coverage, but to allocate the costs of pursuing such coverage to the Indemnifying Party and to provide the Indemnified Party with a full, interim indemnity from the Indemnifying Party until such time as the extent of insurance coverage is determined and is obtained. It is also not the intention of this Section 5.8(c) that the indemnity obligations of the Indemnifying Party should be viewed as “additional insurance” by any insurer.

(vii) Notwithstanding anything to the contrary in this Section 5.8(c), the Indemnified Party in its sole discretion may pursue insurance coverage for the benefit of the Indemnifying Party before the Indemnifying Party has requested it to do so. In such event, the Indemnified Party may unilaterally take any steps it determines to be necessary to preserve such insurance coverage, including, by way of example and not by way of limitation, tendering the defense of any claim or suit to an insurer or insurers of the Indemnified Party if the Indemnified Party concludes that such action may be required by the relevant insurance policy or policies. Any such actions by the Indemnified Party will not relieve the Indemnifying Party of any of its obligations to the Indemnified Party under this Agreement, including the Indemnifying Party’s obligation to pay directly, or reimburse the Indemnified Party for, costs and expenses.

(viii) For purposes of this Section 5.8(c), the following will not be considered insurance available to any TimkenSteel Group members as an Indemnifying Party: (A) any deductible payable by the Indemnified Party; (B) any retention payable by the Indemnified Party; (C) any co‑insurance payable by the Indemnified Party; and (D) any coverage that ultimately will be payable or reimbursable by the Indemnified Party through any arrangement, including an insurance‑fronting arrangement or fronted insurance policy.

(ix) It is the intention of this Section 5.8(c) to make insurance available to the Indemnifying Party only in those instances in which there has been a final transfer of the risk to a solvent third‑party commercial insurer.

5.9 Indemnification Obligations Net of Taxes. For all Tax purposes, Timken and TimkenSteel agree to treat any indemnification payment paid pursuant to this Article V as either a contribution made by Timken to TimkenSteel or a distribution made by TimkenSteel to Timken, as the case may be, occurring immediately prior to the Distribution Date. The amount of any Damages for which indemnification is provided

Exhibit 2.1

under this Agreement will be net of Taxes. Accordingly, any indemnification payment paid pursuant to this Article V will be decreased to take into account any reduction in taxable income of the Indemnified Party arising from the payment by the Indemnified Party of such indemnified liability and increased to take into account any inclusion of taxable income of the Indemnified Party arising from the receipt of such indemnity payment if there is any such increase, notwithstanding the first sentence of this Section 5.9 (collectively, “Tax Benefits”). For purposes of this Section 5.9, any Tax Benefit will be determined (i) using the highest applicable marginal U.S. federal corporate income tax rate in effect at the time of the determination (and excluding any state income tax effect of such inclusion or reduction) and (ii) assuming that the Indemnified Party will be liable for Taxes at such rate, the Indemnified Party has sufficient taxable income to use any tax deduction, and has no other relevant Tax Attributes (as defined in the Tax Sharing Agreement) at the time of the determination.

5.10 Remedies Cumulative; Limitations of Liability. The remedies provided in this Article V are cumulative and will not preclude any Indemnified Party from asserting any other rights or from seeking any and all other remedies against any Indemnifying Party, except that the remedies provided in this Article V will be the exclusive remedy for claims for contribution or other rights of recovery arising out of or relating to any Environmental Law, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), whether now or hereinafter in effect. Notwithstanding the foregoing, neither TimkenSteel or its Affiliates, on the one hand, nor Timken or its Affiliates, on the other hand, will be liable to the other for any special, indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the Separation, provided that any Liability with respect to a Third‑Party Claim will be considered direct damages.

5.11 Survival of Indemnities. The rights and obligations of each of TimkenSteel or Timken and their respective Indemnified Parties under this Article V will survive any Party’s sale or other transfer of any Assets or businesses or assignment of any Liabilities.

ARTICLE VI
EXCHANGE OF INFORMATION; LITIGATION MANAGEMENT; CONFIDENTIALITY

6.1 Agreement for Exchange of Information. Prior to or as promptly as practicable after the Distribution and from time to time as reasonably requested by either Party, the Party receiving the request will deliver to the requesting Party, at the expense of the requesting Party: (a) any corporate books and records of any member of the requesting Party’s Group in the possession of the Party receiving the request or any member of its Group and (b) originals or copies of any corporate books and records of the Group of the Party receiving the request that primarily relate to the requesting Party’s Business, its Assets or its Liabilities. From and after the Distribution, all such books, records and copies (where copies are delivered in lieu of originals), whether or not delivered, will be the property of the members of the requesting Party’s Group; provided, however, that all such Information contained in such books, records or copies

Exhibit 2.1

relating to the other Party’s Group will be subject to the applicable confidentiality provisions and restricted use provisions, if any, contained in this Agreement or the Ancillary Agreements and any confidentiality restrictions imposed by applicable Law. Each Party may retain copies of any original books and records delivered to the other Party pursuant to this Section 6.1; provided, however, that all such Information contained in such books, records or copies (whether or not delivered to the requesting Party) relating to the requesting Party’s Group will be subject to the applicable confidentiality provisions and restricted use provisions, if any, contained in this Agreement or the Ancillary Agreements and any confidentiality restrictions imposed by applicable Law.

6.2 Access to Information. In addition to the provisions set forth in Section 6.1 and except in the case of an adversarial Action or threatened adversarial Action by any member of one Group against any member of the other Group (which will be governed by such discovery rules as may be applicable thereto), from and after the Distribution and upon reasonable notice, a member of either Group may request, on behalf of itself or its representatives, at the expense of the requesting Party, reasonable access and duplicating rights during normal business hours to all Information developed or obtained prior to the Distribution within the possession of any member of the other Group and to the personnel of any member of the other Group, in each case, to the extent such access relates to the requesting Party or its Business, its Assets or Liabilities, this Agreement or any Ancillary Agreement. In each case, the requesting Party will cooperate with the other Party to minimize the risk of unreasonable interference with the other Party’s business. The Party receiving the request will have the right to deny access to the Information if such Party determines in its good faith that the exchange of such Information is reasonably likely to violate any Law or Contract, or waive or jeopardize any attorney‑client privilege or attorney work product protection; provided, however, that the Parties will, and will cause their respective Subsidiaries to, take all reasonable measures to permit the sharing of such Information in a manner that avoids any such harm or consequence. In the event access is granted to any Information in this Agreement or in the Ancillary Agreements to which access is restricted by Law or otherwise, the Parties will, and will cause their respective Subsidiaries to, take such actions as are reasonably necessary, proper or advisable to have such restrictions removed or to seek an exemption therefrom or to otherwise provide the requesting Party with the benefit of the Information to the same extent such actions would have been taken on behalf of the requesting Party had such a restriction not existed and the Distribution not occurred.

6.3 Litigation Management and Support; Production of Witnesses.

(d) From and after the Distribution, TimkenSteel (or other applicable member of the TimkenSteel Group) will be responsible for managing, and will have the authority to manage, the defense or prosecution, as applicable, and resolution (including settlement) of any TimkenSteel Litigation.

Exhibit 2.1

(e) Notwithstanding any provisions of Section 6.2 to the contrary, after the Distribution, each member of the TimkenSteel Group and the Bearings Group will use reasonable best efforts to assist the other with respect to any Third‑Party Claim or potential Third‑Party Claim. In addition, any member of either Group will have the right to request in writing that a member of the other Group make available for consultation or witness purposes, its directors, officers, employees, consultants or agents who have expertise or knowledge with respect to the other Party’s business or products or matters in litigation or alternative dispute resolution to the extent that the requesting Party believes any such persons may reasonably be useful or required in connection with any legal, administrative or other proceedings in which the requesting Party may from time to time be involved. Upon such request, the affected members of the applicable Group will select a person or persons to provide the requested assistance after conferring in good faith to determine which person or persons should provide such assistance. Upon such determination, the requested Party agrees to make the designated person or persons available to the requesting Party upon reasonable notice to the same extent such requested Party would have made such person available if the Distribution had not occurred. The requesting Party agrees to cooperate with the requested Party in giving consideration to such persons’ business demands.

6.4 Reimbursement. Except to the extent otherwise contemplated by this Agreement or any Ancillary Agreement, the Party requesting Information, consulting or witness services under this Article VI will reimburse the recipient for the reasonable and documented costs and expenses, if any, incurred in providing such Information, consulting or witness services to the requesting Party.

6.5 Retention of Records. Except as otherwise required by Law or agreed in writing, or as otherwise provided in any Ancillary Agreement, each member of the TimkenSteel Group and the Bearings Group will use reasonable best efforts to retain, for the retention periods set forth in its record retention policy as in effect on the Distribution Date or as amended after the Distribution Date in accordance with the following sentence (but in no event for a period longer than 10 years after the Distribution Date), except for such longer period as required by Law, this Agreement or the Ancillary Agreements, all Information in such Party’s possession substantially relating to the other Party or its Business, its Assets or Liabilities, this Agreement or the Ancillary Agreements (the “Retained Information”). Each member of the TimkenSteel Group or the Bearings Group may amend its record retention policy after the Distribution Date so long as (a) the amended policy complies with applicable Law, (b) the amended policy treats the Retained Information in the same manner as such member’s other Information and (c) the amended policy does not allow for the destruction of any Retained Information prior to the earliest date after the Distribution on which such member would have been able to destroy such Retained Information under the policy in effect as of the Distribution. If any member of either Group amends its record retention policy in compliance with the preceding sentence in a manner that reduces the retention period for any Retained Information, it will provide TimkenSteel, in the case of any such amendment by a member of the Bearings Group, or Timken, in the case of any such amendment by any member of the TimkenSteel Group, written notice

Exhibit 2.1

detailing the changes to the record retention policy, and the Party receiving such notice and the members of its Group will have the opportunity to obtain any Retained Information that would be eligible for destruction under the revised policy at least 90 days prior to the destruction of such Retained Information.

6.6 Privileged Information. In furtherance of the rights and obligations of the Parties set forth in this Article VI:

(f) Each of TimkenSteel (on behalf of itself and the other TimkenSteel Entities) and Timken (on behalf of itself and the other Bearings Entities) acknowledges that:

(i) each member of the TimkenSteel Group and the Bearings Group has or may obtain Information that is or may be protected from disclosure pursuant to the attorney‑client privilege, the work product doctrine, the common interest and joint defense doctrines or other applicable privileges (“Privileged Information”);

(ii) actual, threatened or future litigation, investigations, proceedings (including arbitration proceedings), claims or other legal matters have been or may be asserted by or against, or otherwise affect, some or all members of the TimkenSteel Group or the Bearings Group (“Litigation Matters”);

(iii) members of the TimkenSteel Group and the Bearings Group have or may in the future have a common legal interest in Litigation Matters, in the Privileged Information and in the preservation of the protected status of the Privileged Information; and

(iv) each of TimkenSteel and Timken (on behalf of itself and the other members of its Group) intends that the transactions contemplated by this Agreement and the Ancillary Agreements and any transfer of Privileged Information in connection herewith or therewith will not operate as a waiver of any applicable privilege or protection afforded Privileged Information.

(g) Each of TimkenSteel and Timken agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose knowingly or otherwise waive any privilege or protection attaching to any Privileged Information relating to a member of the other Group or relating to or arising in connection with the relationship between the Groups prior to the Distribution, without providing prompt written notice to and obtaining the prior written consent of the other.

(h) Upon any member of the TimkenSteel Group or the Bearings Group receiving any subpoena or other compulsory disclosure notice from a Governmental Authority that requests disclosure of Privileged Information belonging to a member of the other Group, the recipient of the notice will promptly provide to Timken, in the case of receipt by a member of the TimkenSteel Group, or to TimkenSteel, in the case of receipt by a member of the Bearings Group, a copy of such notice, the intended response and all materials or information relating to the other Group that might be

Exhibit 2.1

disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved as provided in Article VII, the members of the TimkenSteel Group and the Bearings Entities will cooperate to assert all defenses to disclosure claimed, at the cost and expense of the members of the Group claiming such defenses to disclosure, and will not disclose any disputed documents or information until all legal defenses and claims of privilege have been Finally Determined.

6.7 Confidentiality.

(d) From and after the Distribution, each of the Parties will hold, and will cause the other members of its Group to hold, in strict confidence, with at least the same degree of care that it applies to its own business sensitive and proprietary information, all business sensitive or proprietary Information concerning or belonging to the members of the other Group (such Information, “Confidential Information”) obtained by it prior to the Distribution or furnished to it by any member of the other Group pursuant to this Agreement or any Ancillary Agreement. Neither Party will (and each Party will cause the other members of its Group not to) disclose any Confidential Information to any other Person, except (i) to the extent that disclosure is compelled by subpoena or other compulsory disclosure notice from a Governmental Authority or, in the opinion of Timken’s or TimkenSteel’s counsel (as the case may be), by other requirements of Law, but only after compliance with Section 6.7(b), (ii) to the extent such Party can show that such Confidential Information was (A) in the public domain through no fault of such Party or any member of such Group or any of its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (B) later lawfully acquired from other sources by such Party (or any member of such Party’s Group), which sources are not themselves bound by a confidentiality obligation or (C) independently generated without reference to any proprietary or confidential Information of the disclosing Party or the other members of its Group or (iii) to its directors, officers, employees, agents, accountants, counsel and other advisors and representatives who need to know such Information (who will be advised of their obligations hereunder with respect to such Information in advance of its disclosure to such persons). Neither Party will (and each Party will cause the other members of its Group not to) use any Confidential Information for any purpose other than for which it was disclosed by any member of the other Group.

(e) Upon any member of the TimkenSteel Group or the Bearings Group receiving any subpoena or other compulsory disclosure notice from a Governmental Authority that requests disclosure of Confidential Information that is subject to the confidentiality provisions of this Section 6.7, the recipient of the notice will promptly provide to Timken, in the case of receipt by a member of the TimkenSteel Group, or to TimkenSteel, in the case of receipt by a member of the Bearings Group, a copy of such notice and an opportunity to seek reasonable protective arrangements. In the event that such appropriate protective arrangements are not obtained, the Person that is required to disclose such Confidential Information will furnish, or cause to be furnished, only that portion of such Confidential Information that is legally required to be disclosed and will

Exhibit 2.1

use reasonable best efforts to ensure that confidential treatment is accorded such Confidential Information.

6.8 Joint Defense. In the event that both a member of the Bearings Group and a member of the TimkenSteel Group are defendants in the same Action, upon reasonable request of a member of either Group, the appropriate member or members of each such Group will enter into a written joint defense agreement in a form reasonably acceptable to such Parties.

ARTICLE VII

DISPUTE RESOLUTION

7.1 Dispute Process.

(g) The Parties will use commercially reasonable efforts to resolve expeditiously and on a mutually acceptable negotiated basis any dispute or disagreement between the Parties arising out of or relating to this Agreement or any Ancillary Agreements (other than a Third‑Party Claim) (a “Dispute”) exclusively as follows: (i) first, by engaging in an informal dispute resolution process with the possibility of mediation as provided in Section 7.2; and (ii) then, if negotiation and mediation fail, by referring the Dispute to binding arbitration as provided in Section 7.3. Each Party agrees on behalf of itself and each member of its respective Group that the procedures set forth in this Article VII will be the exclusive means for resolution of any Dispute. The initiation of informal dispute resolution or arbitration hereunder will toll the applicable statute of limitations for the duration of any such proceedings.

(h) Within three business days of receipt of a Dispute Notice by either Party pursuant to Section 7.2(a), TimkenSteel and Timken will form a steering committee (the “Governance Committee”), which will be comprised of four members, two of whom will be appointed by TimkenSteel and two of whom will be appointed by Timken, to oversee the dispute resolution process provided in this Article VII (the “Governance Committee”). The Parties will use commercially reasonable efforts to cause their respective members of the Governance Committee to make a good faith effort to promptly resolve all Disputes referred to the Governance Committee pursuant to Section 7.2.

7.2 Informal Dispute Resolution.

(f) The Dispute resolution process will begin with a written notice from one Party to the other (a “Dispute Notice”), (i) reasonably describing the nature of the Dispute and the outcome desired by the notifying Party and (ii) requesting the formation of the Governance Committee and referral of the Dispute to the Governance Committee for good faith negotiations and resolution.

(g) Following referral of the matter to the Governance Committee, the Parties will cause the Governance Committee to meet as often as the Parties reasonably deem necessary in order to gather and furnish to the other all Information

Exhibit 2.1

with respect to the Dispute which the Parties believe to be appropriate and germane in connection with the resolution of the Dispute.

(h) During the course of the negotiation, subject to the Parties’ respective confidentiality obligations and subject to the provisions of Article VI, all reasonable requests made by either Party to the other for Information will be honored in order that the members of the Governance Committee may be fully advised in the matter. The specific format for the Governance Committee’s discussions and negotiations will be left to the discretion of the Governance Committee but may include the preparation of agreed upon statements of fact or written statements of position furnished to the other Party.

(i) If the Governance Committee does not agree to a resolution of a Dispute within 30 days following the receipt of the Dispute Notice given under Section 7.2(a), or if a resolution agreed to by the Governance Committee fails to resolve the Dispute, a Party may by formal notice pursuant to Section 8.6 refer the Dispute for resolution by the Chief Executive Officer (“CEO”) of each Party, each of whom will have the authority to resolve the Dispute on behalf of their respective Party. The Parties’ CEOs will promptly meet in person or by phone to attempt to resolve the Dispute in good faith.

(j) If the Dispute has not been resolved by the Parties’ CEOs within 30 days following delivery of the formal notice given under Section 7.2(d), either Party may submit the Dispute for resolution by mediation. The mediation will be conducted in Canton, Ohio by a single mediator from JAMS. The Parties will mutually select the mediator from the JAMS neutral panelists list. If the Parties do not agree on the selection of the mediator within 30 days following receipt by the Parties of the list of panelists, the mediator will be selected from the list of neutral panelists pursuant to the rules for selection of arbitrators in the JAMS Comprehensive Arbitration Rules and Procedures. The mediator will have 30 days from the date the Dispute is submitted to him or her (or such longer period as the Parties may mutually agree in writing) (the “Mediation Period”) to attempt to resolve the dispute, and the Parties will cooperate fully in the mediation process. The Parties will share equally the costs, fees and expenses of the mediator and any payments to JAMS for such mediation. If the Dispute has not been resolved through mediation within the Mediation Period, each Party may refer the dispute to arbitration in accordance with Section 7.3.

(k) Except as otherwise independently discoverable, nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences or discussions to settle a Dispute pursuant to this Section 7.2 will be offered or received as evidence or used for impeachment or for any other purpose in any proceedings (including the arbitration proceedings contemplated in Section 7.3), but will be considered to have been disclosed for settlement purposes only.

7.3 Arbitration.

Exhibit 2.1

(d) If the mediation contemplated by Section 7.2(e) does not resolve the Dispute, and a Party wishes to pursue its rights relating to such Dispute, then, except as provided in and subject to Section 7.4, such Dispute will be submitted to final and binding arbitration as provided in this Section 7.3. Any Dispute concerning the propriety of the commencement of the arbitration will be finally settled by such arbitration.

(e) The arbitration will be held in Canton, Ohio in accordance with the JAMS Comprehensive Arbitration Rules and Procedures. The arbitration will be conducted by a single arbitrator selected by mutual agreement of the Parties. If the Parties do not agree on the selection of the arbitrator within 30 days following receipt by the Parties of the list of panelists, the arbitrator will be selected from the JAMS list of neutral panelists (exclusive of the mediator), pursuant to the JAMS Comprehensive Arbitration Rules and Procedures.

(f) The decision of the arbitrator with respect to the Dispute will be final and non‑appealable (other than for fraud) and may be enforced in any court of competent jurisdiction.

(g) The use of any mediation or other “alternative dispute resolution” procedures will not be construed under the doctrine of laches, waiver or estoppel to adversely affect the rights of any party to the Dispute.

(h) Discovery will be allowed only pursuant to Rule 17 of the JAMS Comprehensive Arbitration Rules and Procedures.

(i) The Parties will share equally the costs and expenses of the arbitrator, but each Party will bear its own costs and expenses associated with participating in the arbitration, including its attorneys’ and experts’ fees, unless the arbitrator decides that one Party should be responsible for all costs and expenses, including the reasonable attorneys’ fees and experts’ fees of the other Party.

7.4 Interim Relief. Notwithstanding any other provision of Article VII, at any time during the resolution of a Dispute between the Parties, either Party may request a court of competent jurisdiction to grant provisional interim relief, including pre‑arbitration attachments or injunctions, solely (a) for the purpose of preventing or minimizing irreparable harm for which money damages would not provide adequate relief, or (b) in matters involving the disclosure of such Party’s Confidential Information. A delay in seeking injunctive relief attributable to following the procedures of this Article VII or otherwise seeking to amicably resolve the Dispute with the other Party will not serve as a basis to deny injunctive relief.

7.5 Remedies; Failure of a Party to Comply with Dispute Resolution Process. The arbitrators will have no authority or power to limit, expand, alter, amend, modify, revoke or suspend any condition or provision of this Agreement or any Ancillary Agreement nor any right or power to award punitive, exemplary or treble (or other multiple) damages. If either Party does not act in accordance with this Article VII, then

Exhibit 2.1

the other Party may seek all remedies available at law or in equity to enforce this Article VII.

7.6 Expenses. Except as otherwise provided in this Article VII, each Party will bear its own costs, expenses and attorneys’ fees in pursuit and resolution of any Dispute.

7.7 Continuation of Services and Commitments. Unless otherwise agreed in writing, the Parties will, and will cause the members of their respective Groups to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of the dispute resolution pursuant to this Article VII.

ARTICLE VIII
MISCELLANEOUS

8.1 Coordination with Ancillary Agreements; Conflicts. Except as otherwise expressly provided in this Agreement, (a) in the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of an Ancillary Agreement, the provisions of the Ancillary Agreement will control over the inconsistent provisions of this Agreement as to matters expressly addressed in the Ancillary Agreement, and (b) in the event of any conflict or inconsistency between the provisions of this Agreement and the Ancillary Agreements, on the one hand, and the Contribution Agreement, on the other hand, the terms of this Agreement or such Ancillary Agreement (as the case may be) will control. For the avoidance of doubt, the Tax Sharing Agreement will govern all matters (including any indemnities and payments among the Parties and each other member of their respective Groups and the allocation of any rights and obligations pursuant to agreements entered into with Third Parties) relating to Taxes or otherwise expressly addressed in the Tax Sharing Agreement.

8.2 Expenses. Except as otherwise provided in this Agreement, any Ancillary Agreement or any other agreement contemplated hereby, or except as otherwise agreed to in writing by the Parties:

(j) Timken will pay all fees, costs and expenses paid or incurred by Timken and TimkenSteel prior to the Distribution Date in connection with the preparation, execution, delivery and performance of this Agreement, any Ancillary Agreement, any other agreement contemplated hereby or thereby, the Disclosure Documents and the consummation of the Reorganization and the Distribution and the other transactions contemplated hereby and thereby; and

(k) Timken and TimkenSteel will each bear its own costs and expenses incurred after the Distribution Date.

8.3 Termination. This Agreement and any Ancillary Agreement may be terminated by the Timken Board, in its sole and absolute discretion, at any time prior to the Distribution. In the event of any termination of this Agreement prior to the

Exhibit 2.1

Distribution, no Party (or any member of its Group or any of its or their respective directors or officers) will have any Liability or further obligation to any other Party (or any member of its Group) with respect to this Agreement or such Ancillary Agreement.

8.4 Amendment and Modification. Neither this Agreement nor any Ancillary Agreements may be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing expressly designated as an amendment hereto, signed on behalf of each Party hereto or thereto, as applicable.

8.5 Waiver. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement or any Ancillary Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties (and the other members of their respective Groups) under this Agreement or any Ancillary Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder or thereunder. Any agreement on the part of any Party to any such waiver will be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

8.6 Notices. All notices and other communications hereunder will be in writing and will be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt by facsimile, e‑mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next‑day service by a recognized next‑day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder will be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to Timken or any other Bearings Entity:

The Timken Company

4500 Mount Pleasant Street NW

North Canton, Ohio 44720‑5450

Attention: Senior Vice President and General Counsel

Facsimile: (234) 262‑4249

if to TimkenSteel or any other TimkenSteel Entity:

TimkenSteel Corporation

1835 Dueber Avenue, S.W.

Canton, Ohio 44706‑2798

Attention: Executive Vice President and General Counsel

Facsimile: (330) 471‑4041

Exhibit 2.1

8.7 Entire Agreement. This Agreement and the Ancillary Agreements and the Annexes, Exhibits, Schedules and Appendices hereto and thereto constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Parties with respect to the subject matter of this Agreement. None of this Agreement or any of the Ancillary Agreements will be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby and thereby other than those expressly set forth in this Agreement or any of the Ancillary Agreements or in any document required to be delivered hereunder or thereunder. Notwithstanding any oral agreement or course of action of the Parties or their representatives to the contrary, no Party to this Agreement or any Ancillary Agreement will be under any legal obligation to enter into or complete the transactions contemplated hereby or thereby unless and until this Agreement or such Ancillary Agreement, as applicable, will have been executed and delivered by each of the Parties.

8.8 No Third‑Party Beneficiaries. Except for the indemnification rights under this Agreement of any Indemnified Party, nothing in this Agreement or the Ancillary Agreements, express or implied, is intended to or will confer upon any Person other than the Parties and their respective Subsidiaries and their respective successors and permitted assigns and nothing in this Agreement, express or implied, is intended to or will confer upon any other Person any legal or equitable right, benefit or remedy of any nature under, or by reason of, this Agreement or the Ancillary Agreements.

8.9 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby will be governed by, and construed in accordance with, the Laws of the State of Ohio, without regard to the conflicts of law rules thereof.

8.10 Assignment. Except as expressly provided in any Ancillary Agreement, neither this Agreement, any of the Ancillary Agreements nor any of the rights, interests or obligations hereunder or thereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any Party without the prior written consent of the other Party to the agreement being so assigned or delegated, and any such assignment or delegation without such prior written consent will be null and void. If any Party to this Agreement or any Ancillary Agreement (or any of its successors or permitted assigns) (a) will consolidate with or merge into any other Person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (b) will transfer all or substantially all of its properties and/or Assets to any Person, then, and in each such case, the Party (or its successors or permitted assigns, as applicable) will ensure that such Person assumes all of the obligations of such Party (or its successors or permitted assigns, as applicable) under this Agreement and all applicable

Exhibit 2.1

Ancillary Agreements, in which case the consent described in the previous sentence will not be required.

8.11 Severability. Whenever possible, each provision or portion of any provision of this Agreement and the Ancillary Agreements will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement or any Ancillary Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement or such Ancillary Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained in this Agreement or any of the Ancillary Agreements.

8.12 Payment. Except as expressly provided in this Agreement or any Ancillary Agreement, any amount payable pursuant to this Agreement or any Ancillary Agreement by one Party (or any member of such Party’s Group) will be paid within 30 days after presentation of an invoice or a written demand by the Party entitled to receive such payments. Such demand will include documentation setting forth the basis for the amount payable. Any payment not made within 30 days of the written demand for such payment will accrue interest at a rate equal to the rate of interest from time to time announced publicly by The Wall Street Journal as its prime rate, calculated on the basis of a year of 365 days and the number of days elapsed.

8.13 Rules of Construction. Interpretation of this Agreement will be governed by the following rules of construction: (a) words in the singular will be held to include the plural and vice versa and words of one gender will be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, clause, Exhibit and Schedule are references to the Articles, Sections, paragraphs, clauses, Exhibits and Schedules of this Agreement unless otherwise specified; (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement, including the Schedules and Exhibits hereto; (d) references to “$” will mean U.S. dollars; (e) the word “including” and words of similar import when used in this Agreement will mean “including without limitation,” unless otherwise specified, (f) the word “or” will not be exclusive; (g) the word “will” will be construed to have the same meaning and effect as the word “shall”; (h) references to “written” or “in writing” include in electronic form; (i) provisions will apply, when appropriate, to successive events and transactions; (j) the table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement; (k) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (l) a reference to any Person includes such Person’s successors and permitted assigns.

Exhibit 2.1

8.14 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) will be as effective as delivery of a manually executed counterpart of any such Agreement.

[Signatures on Following Page]

Exhibit 2.1

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

THE TIMKEN COMPANY

By: /s/ Philip D. Fracassa____________
Name: Philip D. Fracassa
Title: Chief Financial Officer

TIMKENSTEEL CORPORATION

By: /s/ Christopher J. Holding_________
Name: Christopher J. Holding
Title: Executive Vice President and
Chief Financial Officer

[Signature page to Separation and Distribution Agreement]

Exhibit 10.1

TAX SHARING AGREEMENT

BY AND BETWEEN

THE TIMKEN COMPANY

AND

TIMKENSTEEL CORPORATION

Dated June 30, 2014

Exhibit 10.1

TAX SHARING AGREEMENT

THIS TAX SHARING AGREEMENT (this “Agreement”), dated June 30,2014, is by and between The Timken Company (“Timken”), an Ohio corporation, and TimkenSteel Corporation (“TimkenSteel”), an Ohio corporation. Each of Timken and TimkenSteel is sometimes referred to herein as a “Party” and, collectively, as the “Parties.”

WHEREAS, Timken, through itself and its direct and indirect Subsidiaries, currently conducts the Steel Business and the Bearings Business;

WHEREAS, the board of directors of Timken has determined that it is in the best interests of Timken and its shareholders to separate into two publicly traded companies: (a) Timken, which will continue to conduct, directly and through its Subsidiaries, the Bearings Business, and (b) TimkenSteel, which will continue to conduct, directly and through its Subsidiaries the Steel Business;

WHEREAS, Timken has contributed to TimkenSteel certain assets related to the Steel Business in exchange for the assumption by TimkenSteel of liabilities associated with the Steel Business (the “Contribution”);

WHEREAS, on the Distribution Date and subject to the terms and conditions of this Agreement, Timken will distribute to the Record Holders (as defined in the Separation Agreement), on a pro rata basis, all the outstanding common shares, without par value, of TimkenSteel then owned by Timken (the “Distribution”), and the board of directors of Timken has approved such Distribution;

WHEREAS, for U.S. federal income tax purposes, the Contribution and the Distribution, taken together, are intended to qualify as a reorganization that is described in Sections 355(a) and 368(a)(1)(D) of the Code;

WHEREAS, Timken anticipates receiving an opinion of Covington & Burling LLP to the effect that, among other things, the Contribution and the Distribution, taken together, will be tax-free (except for cash received in lieu of fractional shares) to TimkenSteel, Timken, and the Timken shareholders for U.S. federal income tax purposes under Sections 355(a) and 368(a)(1)(D) and related provisions of the Code;

WHEREAS, prior to consummation of the Contribution and the Distribution, Timken will be the common parent corporation of an affiliated group of corporations within the meaning of Section 1504 of the Code that includes TimkenSteel; and

WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and entitlement to refunds thereof, allocate responsibility for, and cooperation in, the filing of Tax Returns, and provide for certain other matters relating to Taxes, and (b) set forth

Exhibit 10.1

certain covenants and indemnities relating to the preservation of the tax-free status of the Contribution and the Distribution.

NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings:

“Accounting Firm” has the meaning set forth in Section 8.01(b).

“Acting Party” has the meaning set forth in Section 6.02(b).

“Adjustment” means any change in the Tax liability of a taxpayer, determined issue-by-issue or transaction-by-transaction, as the case may be.

“Aggregate Carryback Amount” has the meaning set forth in Section 4.02(c).

“Agreement” has the meaning set forth in the preamble.

“Bearings Business” means (i) the business and operations conducted by Timken and its Subsidiaries prior to the Distribution comprising what is referred to in the Timken 10‑K as the Mobile Industries, Process Industries, and Aerospace segments; (ii) any other business (other than the Steel Business) directly conducted by any member of the Timken Group as of or prior to the Distribution; and (iii) any business operation or assets that, at the time they were discontinued or sold, were not part of the Steel business as then reported in the Timken 10-K.

“Benefited Party” has the meaning set forth in Section 4.01(b).

“Carryback Amount” has the meaning set forth in Section 4.02(c).

“CAT Credit” means the commercial activity Tax credit under Ohio state Tax Law.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Contribution” has the meaning set forth in the preamble.

Exhibit 10.1

“Contribution Agreement” means the Contribution, Assignment and Assumption Agreement, dated April 1, 2014, between the Parties.

“Controlling Party” means Timken or any other member of the Timken Group with respect to any Mixed Business Tax Return and Single Business Tax Return related to the Bearings Business, and TimkenSteel or any other member of the TimkenSteel Group with respect to any Single Business Tax Return related to the Steel Business.

“Counsel” means Covington & Burling LLP.

“Disqualifying Action” means a Timken Disqualifying Action or a TimkenSteel Disqualifying Action.

“Distribution” has the meaning set forth in the preamble.

“Distribution Date” means the date on which the Distribution occurs.

“Due Date” means (i) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return is required to be filed under applicable Law and (ii) with respect to a payment of Taxes, the date on which such payment is required to be made to avoid the incurrence of interest, penalties and/or additions to Tax.

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of the date of this Agreement, between the Parties.

“Extraordinary Transaction” means any action that is not in the Ordinary Course of Business, but shall not include any action described in the Contribution Agreement or Separation Agreement or that is undertaken pursuant to, or in connection with, the Contribution or the Distribution.

“Fifty-Percent or Greater Interest” has the meaning ascribed to such term by Section 355(d)(4) of the Code.

“Final Determination” means the final resolution of liability for any Tax for any taxable period, by or as a result of (i) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the Laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund or credit may be recovered by the jurisdiction imposing the Tax; or (iv) any other final resolution, including by reason of the expiration of the applicable statute of limitations or the execution of a pre-filing agreement with the IRS or other Taxing Authority.

Exhibit 10.1

“Governmental Order” means any order, writ, judgment, injunction, decree or award entered by or with any Governmental Authority.

“Indemnifying Party” means the Party from which the other Party is entitled to seek indemnification pursuant to the provisions of Article 3.

“Indemnified Party” means the Party which is entitled to seek indemnification from the other Party pursuant to the provisions of Article 3.

“Information” has the meaning set forth in Section 7.01(a).

“Information Request” has the meaning set forth in Section 7.01(a).

“Interested Party” means Timken or TimkenSteel (including any successor and/or assign of any of the foregoing), as the case may be, to the extent (i) such Person or a member of such Person’s group is not a Controlling Party with respect to a Tax Proceeding and (ii) such Person or a member of such Person’s group is (A) an Indemnifying Party or (B) an Indemnified Party.

“IRS” means the U.S. Internal Revenue Service or any successor thereto, including its agents, representatives, and attorneys.

“Law” means any statute, law, ordinance, regulation, rule, code or other requirement of a Governmental Authority or any Governmental Order.

“Mixed Business Tax Return” means any Tax Return including any consolidated, combined or unitary Tax Return, that relates to at least one asset or activity that is part of the Bearings Business, on the one hand, and at least one asset or activity that is part of the Steel Business, on the other hand.

“Non-Acting Party” has the meaning set forth in Section 6.02(b).

“Opinion” means the opinion of Counsel to the effect that the Contribution and Distribution, taken together, will qualify as tax-free (except for cash received in lieu of fractional shares) to TimkenSteel, Timken and Timken shareholders for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) and related provisions of the Code.

Exhibit 10.1

“Ordinary Course of Business” means an action taken by a Person only if such action is taken in the ordinary course of the normal day-to-day operations of such Person.

“Party” has the meaning set forth in the preamble.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

“Post-Closing Period” means any taxable period (or portion thereof) beginning after the Distribution Date.

“Post-Distribution Ruling” has the meaning set forth in Section 6.02(b).

“Pre-Closing Period” means any taxable period (or portion thereof) ending on or before the Distribution Date.

“Proposed Acquisition Transaction” means a transaction or series of transactions (or any agreement, understanding, arrangement, or substantial negotiations within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by the applicable Party’s management or shareholders, is a hostile acquisition, or otherwise, as a result of which such Party would merge or consolidate with any other Person or as a result of which one or more Persons would (directly or indirectly) acquire, or have the right to acquire, from such Party and/or one or more holders of outstanding shares of such Party’s common shares, as the case may be, a number of shares of such Party’s common shares that would, when combined with any other changes in ownership of such Party’s common shares pertinent for purposes of Section 355(e) of the Code, comprise 25% or more of (i) the value of all outstanding shares of stock of such Party as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (ii) the total combined voting power of all outstanding shares of voting stock of such Party as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (A) the adoption by a Party of a shareholder rights plan or (B) issuances by a Party that satisfy Safe Harbor VIII (relating to acquisitions in connection with a Person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d). For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or Treasury

Exhibit 10.1

Regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.

“Refund” means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively, applied to other Taxes payable), including any interest paid on or with respect to such refund of Taxes, provided, however, that for purposes of this Agreement, the amount of any Refund required to be paid to another Party shall be reduced by the net amount of any income Taxes imposed on, related to, or attributable to, the receipt or accrual of such Refund.

“Restriction Period” means the period beginning at the effective time of the Distribution and ending on the two-year anniversary of the day after the Distribution Date.

“Section 336(e) Election” has the meaning set forth in Section 6.03.

“Separation Agreement” means the Separation and Distribution Agreement, dated as of the date of this Agreement, between the Parties.

“Single Business Tax Return” means any Tax Return including any consolidated, combined or unitary Tax Return, that includes assets or activities relating only to the Bearings Business, on the one hand, or the Steel Business, on the other (but not both), whether or not the Person charged by Law to file such Tax Return is engaged in the business to which the Tax Return relates.

“Steel Business” means (i) the business and operations conducted by Timken and its Subsidiaries prior to the Distribution comprising what is referred to in the Timken 10‑K as the Steel segment; (ii) any other business directly conducted by any member of the TimkenSteel Group (as defined in the Separation Agreement) primarily through the use of TimkenSteel Assets (as defined in the Separation Agreement) as of or prior to the date of the Distribution; and (iii) any business operation or assets that, at the time they were discontinued or sold, were part of the Steel business as then reported in the Timken 10-K.

“Straddle Period” means any taxable period that begins on or before and ends after the Distribution Date.

“Subsidiary” of any Person means another Person (a) in which the first Person owns, directly or indirectly, an amount of the voting securities, voting partnership interests or other voting ownership sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting securities, interests or ownership, a majority of the equity interests in such other Person), or (b) of which the first Person otherwise has the power to direct the management and policies. A Subsidiary may be owned directly or indirectly by such first Person or by another Subsidiary of such first Person.

Exhibit 10.1

“Tax” means (i) all taxes, charges, fees, duties, levies, imposts, or other similar assessments, imposed by any U.S. federal, state or local or foreign governmental authority, including income, gross receipts, excise, property, sales, use, license, common shares, transfer, franchise, payroll, withholding, social security, value added, goods and services, consumption, and other taxes, (ii) any interest, penalties or additions attributable thereto and (iii) all liabilities in respect of any items described in clauses (i) or (ii) payable by reason of assumption, transferee or successor liability, operation of Law or Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law).

“Tax Attribute” means a net operating loss, net capital loss, tax credit, earnings and profits, overall foreign loss, separate limitation loss, previously taxed income, or any item of income, gain, loss, deduction, credit, recapture or other item that may have the effect of increasing or decreasing any income Tax paid or payable.

“Tax Benefit” has the meaning set forth in Section 3.04.

“Tax-Free Status of the Transactions” means the tax-free treatment accorded to the Contribution and the Distribution as set forth in the Opinion.

“Tax Materials” has the meaning set forth in Section 6.01(a).

“Tax Matter” has the meaning set forth in Section 7.01(a)(i).

“Tax Package” means all relevant Tax-related information relating to the operations of the Bearings Business or the Steel Business, as applicable, that is reasonably necessary to prepare and file the applicable Tax Return.

“Tax Proceeding” means any audit, assessment of Taxes, pre-filing agreement, other examination by any Taxing Authority, proceeding, appeal of a proceeding or litigation relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

“Tax Representation Letter” means any letter containing certain representations and covenants issued by Timken or any of its Subsidiaries to Counsel in connection with the Opinion.

“Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) required to be supplied to, or filed with, a Taxing Authority in connection with the payment, determination, assessment or collection of any Tax or the administration of any Laws relating to any Tax and any amended Tax return or claim for refund.

Exhibit 10.1

“Taxing Authority” means any governmental authority or any subdivision, agency, commission or entity thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

“Timken” has the meaning set forth in the preamble.

“Timken 10‑K” means Timken’s Annual Report on Form 10‑K, including for the fiscal year ended December 31, 2013, and all prior fiscal years.

“Timken Allocable Portion” means, with respect to any Tax paid after the Distribution Date relating to a Mixed Business Tax Return, the amount of any such Tax less the TimkenSteel Allocable Portion.

“Timken Common Shares” means (i) all classes or series of outstanding common shares of Timken for U.S. federal income tax purposes, including common stock and all other instruments treated as outstanding equity in Timken for U.S. federal income tax purposes, and (ii) all options, warrants and other rights to acquire such stock.

“Timken Disqualifying Action” means (i) any action (or the failure to take any action) within its control by Timken or any Timken Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions), or (ii) any event (or series of events) involving Timken Common Shares, any assets of Timken or any assets of any Timken Entity that, in each case, negates the Tax-Free Status of the Transactions in whole or in part, regardless of whether such act or failure to act (x) is covered by a Post-Distribution Ruling or an Unqualified Tax Opinion, or (y) occurs during or after the Restriction Period.

“Timken Entity” means a member of the Timken Group.

“Timken Group” means Timken and each of its direct or indirect Subsidiaries that is not a member of the TimkenSteel Group, and each Person that is or becomes a member of the Timken Group after the Distribution, including any Person that is or was merged into Timken or any direct or indirect Subsidiary that is not a member of the TimkenSteel Group.

“Timken Percentage” 100% minus the TimkenSteel Percentage.

“Timken Taxes” means, without duplication, (i) any Taxes imposed on Timken (or any of its Subsidiaries) or TimkenSteel (or any of its Subsidiaries) attributable to a Timken Disqualifying Action, (ii) the Timken Percentage of any Taxes imposed on Timken (or any of its Subsidiaries) or TimkenSteel (or any of its Subsidiaries) attributable to both a TimkenSteel Disqualifying Action and a Timken Disqualifying Action, (iii) 50% of all Transfer Taxes, (iv) the Timken Allocable Portion of any Taxes in respect of a Mixed Business Tax Return, and (v) any Taxes in respect of any Single

Exhibit 10.1

Business Tax Return related to the Bearings Business. For the avoidance of doubt, Timken Taxes shall not include any Taxes solely attributable to a TimkenSteel Disqualifying Action.

“TimkenSteel” has the meaning set forth in the preamble.

“TimkenSteel Allocable Portion” means, with respect to any Tax paid after the Distribution Date or any Adjustments to Tax after the Distribution Date relating to a Mixed Business Tax Return, the amount of such Tax attributable to TimkenSteel, any TimkenSteel Entity, or the Steel Business, as determined taking into account historical practice (including historical methodologies for making corporate allocations), the Code, Treasury Regulations, and any applicable state, local or foreign law. For purposes of determining the TimkenSteel Allocable Portion of any Tax related to a Pre-Closing Period or Straddle Period for which no Tax Return has been filed, the amount of the TimkenSteel Allocable Portion will be determined after subtracting the amount of the Tax (whether positive, or if a loss, negative) attributable to TimkenSteel, any TimkenSteel Entity, or the Steel Business as agreed to by the Parties with respect to the portion of the Tax year ending on June 30, 2014.

“TimkenSteel Common Shares” means (i) all classes or series of outstanding common shares of TimkenSteel for U.S. federal income tax purposes, including common shares and all other instruments treated as outstanding equity in TimkenSteel for U.S. federal income tax purposes, and (ii) all options, warrants and other rights to acquire such stock.

“TimkenSteel Disqualifying Action” means (i) any action (or the failure to take any action) by TimkenSteel or any TimkenSteel Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions), or (ii) any event (or series of events) involving the TimkenSteel Common Shares, any assets of TimkenSteel or any assets of any TimkenSteel Entity that, in each case, negates the Tax-Free Status of the Transactions in whole or in part, regardless of whether such act or failure to act (A) is covered by a Post-Distribution Ruling or an Unqualified Tax Opinion, or (B) occurs during or after the Restriction Period.

“TimkenSteel Entity” means a member of the TimkenSteel Group.

“TimkenSteel Group” means TimkenSteel and each Person that will be a direct or indirect Subsidiary of TimkenSteel immediately prior to the Distribution (but after giving effect to the Contribution), including the entities set forth on Schedule 1.1(E) of the Separation Agreement, and each Person that is or becomes a member of the TimkenSteel Group after the Distribution, including in all circumstances any Person that is or was merged into TimkenSteel or any direct or indirect Subsidiary that is a member of the TimkenSteel Group.

Exhibit 10.1

“TimkenSteel Percentage” means the percentage determined by dividing (i) the average total value of the TimkenSteel Common Shares for the five business days following the Distribution Date, computed for each day by averaging the intraday high and intraday low trading price of the TimkenSteel Common Shares and multiplying such amount by the total number of shares of TimkenSteel Common Shares outstanding on such day, by (ii) the sum of (A) the amount determined in clause (i) and (B) the average total value of the Timken Common Shares for the five business days following the Distribution Date, computed for each day by averaging the intraday high and intraday low trading price of the Timken Common Shares and multiplying such amount by the total number of shares of Timken Common Shares outstanding on such day.

“TimkenSteel Taxes” means, without duplication, (i) any Taxes imposed on Timken (or any of its Subsidiaries) or TimkenSteel (or any of its Subsidiaries) attributable to a TimkenSteel Disqualifying Action, (ii) the TimkenSteel Percentage of any Taxes imposed on Timken (or any of its Subsidiaries) or TimkenSteel (or any of its Subsidiaries) attributable to both a TimkenSteel Disqualifying Action and a Timken Disqualifying Action, (iii) 50% of all Transfer Taxes, (iv) the TimkenSteel Allocable Portion of any Taxes in respect of a Mixed Business Tax Return, and (v) any Taxes in respect of any Single Business Tax Return related to the Steel Business. For the avoidance of doubt, TimkenSteel Taxes shall not include any Taxes solely attributable to a Timken Disqualifying Action.

“Transfer Taxes” means all sales, use, transfer, real property transfer, intangible, recordation, registration, documentary, stamp or similar Taxes imposed on the Contribution or the Distribution, and paid after the Distribution Date.

“Treasury Regulations” means the final and temporary (but not proposed) Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Unqualified Tax Opinion” means a reasoned “will” opinion, without qualifications, of a nationally recognized law firm to the effect that a transaction will not affect the Tax-Free Status of the Transactions. For purposes of this definition, an opinion is reasoned if it describes the reasons for the conclusions and includes the facts, assumptions, and supporting legal analysis.

“U.S.” means the United States of America.

ARTICLE II.

PREPARATION, FILING AND PAYMENT OF TAXES

Section 2.01 Responsibility of Parties to Prepare Tax Returns and Pay Taxing Authority.

Exhibit 10.1

(a) Timken Tax Returns. Timken shall prepare and file (or cause a Timken Entity to prepare and file) all (i) Single Business Tax Returns relating to the Bearings Business and (ii) all Mixed Business Tax Returns, and shall pay (or cause such Timken Entity to pay) all Taxes shown to be due and payable on such Tax Returns.

(b) TimkenSteel Tax Returns. TimkenSteel shall prepare and file (or cause a TimkenSteel Entity to prepare and file) all Single Business Tax Returns relating to the Steel Business, and shall pay (or cause such TimkenSteel Entity to pay) all Taxes shown to be due and payable on such Tax Returns.

Section 2.02 Tax Return Procedures for Mixed Business Tax Returns.

(a) Timken shall prepare all Mixed Business Tax Returns consistent with historical practice, the Opinion, and the Tax Representation Letter unless otherwise required by Law or agreed to in writing by TimkenSteel. In the event that there is no historical practice for reporting a particular item or matter, Timken shall determine the reporting of such item or matter provided that such determination is, in the reasonable opinion of Timken, at least more likely than not to be sustained. In connection with the preparation of any Mixed Business Tax Return, TimkenSteel will assist and cooperate with Timken with respect to Timken’s preparation of each Mixed Business Tax Return, including assisting Timken in the preparation of a pro forma Tax Return for TimkenSteel and any TimkenSteel Entity to be used in determining the TimkenSteel Allocable Portion with respect to such Mixed Business Tax Return.

(b) In connection with any Mixed Business Tax Return, no later than 30 days prior to the Due Date of each such Tax Return, Timken shall make available or cause to be made available drafts of such Tax Return (together with all related work papers) and a document determining the TimkenSteel Allocable Portion of Taxes with respect to such Mixed Business Tax Return to TimkenSteel. The failure of Timken to make available any such materials described in the preceding sentence to TimkenSteel within the time frame described in the preceding sentence shall not relieve TimkenSteel of any obligation which it may have to Timken under this Agreement except to the extent that TimkenSteel is actually prejudiced by such failure. TimkenSteel shall have access to any and all data and information necessary for the preparation of all such Mixed Business Tax Returns and the Parties shall cooperate fully in the preparation and review of such Tax Returns. Subject to the preceding sentence, no later than 15 days after receipt of such Mixed Business Tax Returns (and related documents), TimkenSteel shall have a right to object to such Mixed Business Tax Return (or items with respect thereto, including the TimkenSteel Allocable Portion with respect to such Mixed Business Tax

Exhibit 10.1

Return) by written notice to Timken; such written notice shall contain such disputed item (or items) and the basis for its objection. TimkenSteel shall pay to Timken no later than five days prior to the Due Date of each such Tax Return the TimkenSteel Allocable Portion of Taxes shown as due and payable on such Mixed Business Tax Return (net of any prepayment made against such amount).

(c) With respect to a Mixed Business Tax Return delivered by Timken to TimkenSteel pursuant to Section 2.02(b), if TimkenSteel does not object by proper written notice described in Section 2.02(b), such Mixed Business Tax Return and the calculation of the TimkenSteel Allocable Portion with respect thereto shall be deemed to have been accepted and agreed upon, and to be final and conclusive, for purposes of this Section 2.02(c). If TimkenSteel does object by proper written notice described in Section 2.02(b), Timken and TimkenSteel shall act in good faith to resolve any such dispute as promptly as practicable; provided, however, that, notwithstanding anything to the contrary contained herein, if Timken and TimkenSteel have not resolved the disputed item or items by the day five days prior to the Due Date of such Mixed Business Tax Return, such Tax Return shall be filed as prepared pursuant to this Section 2.02(a) (revised to reflect all initially disputed items that Timken and TimkenSteel have agreed upon prior to such date). In the event that a Mixed Business Tax Return is filed that includes any disputed item for which proper notice was given pursuant to Section 2.02(b) that was not finally resolved and agreed upon, such disputed item (or items) shall be resolved in accordance with Section 8.01 (interpreted without regard to the requirement that the Accounting Firm render a determination no later than the Due Date of the Tax Return at issue). In the event that the resolution of such disputed item (or items) in accordance with Section 8.01 with respect to a Mixed Business Tax Return is inconsistent with such Mixed Business Tax Return as filed, Timken (with cooperation from TimkenSteel, if necessary) shall, as promptly as practicable, amend such Tax Return to properly reflect the final resolution of the disputed item (or items). In the event that the amount of Taxes shown to be due and owing on a Mixed Business Tax Return is adjusted as a result of a resolution pursuant to this Section 2.02(c), proper adjustment shall be made to the amounts previously paid or required to be paid in a manner that reflects such resolution.

Exhibit 10.1

Section 2.03 Expenses. Except as provided otherwise herein or in the Separation Agreement, each Party shall bear its own expenses incurred in connection with this Article 2.

Section 2.04 Coordination with Article 4. This Article 2 shall not apply to any amended Tax Returns, other than such Tax Returns required to be amended under Section 2.02(c), all other such amended Tax Returns governed by Article 4.

ARTICLE III.

PAYMENT OF TAXES AND INDEMNIFICATION.

Exhibit 10.1

Section 3.01 Payment and Indemnification by Timken. Timken shall pay, and shall indemnify and hold the TimkenSteel Group harmless from and against, without duplication, (a) all Timken Taxes, (b) all Taxes incurred by TimkenSteel or any TimkenSteel Entity by reason of the breach by Timken of any of its representations, warranties or covenants hereunder, and (c) any external costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses but excluding any expenses described in Section 2.03).

Section 3.02 Payment and Indemnification by TimkenSteel. TimkenSteel shall pay, and shall indemnify and hold the Timken Group harmless from and against, without duplication, (a) all TimkenSteel Taxes, (b) all Taxes incurred by Timken or any Timken Entity by reason of the breach by TimkenSteel of any of its representations, warranties or covenants hereunder, and (c) any external costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses but excluding any expenses described in Section 2.03).

Section 3.03 Timing of Tax Payments. Unless otherwise provided in this Agreement, in the event that a Party (the “Indemnifying Party”) is required to make a payment to another Party (the “Indemnified Party”) pursuant to this Article 3, the Indemnified Party shall deliver written notice of the payments to the Indemnifying Party, including proof of payment to the Taxing Authority, in accordance with Section 8.19 on the last day of the calendar quarter in which the obligation giving rise to the indemnification payment must be satisfied, and the Indemnifying Party shall be required to make payment to the Indemnified Party within 10 days after notice of such payment is delivered to the Indemnifying Party.

Exhibit 10.1

Section 3.04 Characterization of and Adjustments to Payments. For all Tax purposes, Timken and TimkenSteel agree to treat (a) any payment required by this Agreement or (b) any indemnity payments required by the Contribution Agreement or Separation Agreement (other than payments pursuant to Section 8.03) as either a contribution by Timken to TimkenSteel or a distribution by TimkenSteel to Timken, as the case may be, occurring immediately prior to the Distribution Date. Except as otherwise provided, any payment under this Agreement shall be decreased to take into account any reduction in taxable income of the Indemnified Party arising from the payment by the Indemnified Party of such indemnified liability and increased to take into account any inclusion in taxable income of the Indemnified Party arising from the receipt of such indemnity payment if there is any such increase notwithstanding the first sentence of this Section 3.04 (collectively, “Tax Benefits”). Any Tax Benefit shall be determined (i) using the highest applicable marginal U.S. federal corporate income tax rate in effect at the time of the determination (and excluding any state income tax effect of such inclusion or reduction) and (ii) assuming that the Indemnified Party will be liable for Taxes at such rate, the Indemnified Party has sufficient taxable income to use any tax deduction, and has no other relevant Tax Attributes at the time of the determination. For the avoidance of doubt, the previous two sentences of this Section 3.04 do not apply to any payments made pursuant to Section 6.03.

ARTICLE IV.

REFUNDS, CARRYBACKS, AMENDMENTS AND TAX ATTRIBUTES.

Section 4.01 Refunds

(a) Except as provided in Section 4.02, Timken shall be entitled to all Refunds of Taxes with respect to which Timken would be liable for payment under Article 3 if such Taxes were paid after the Distribution Date, and TimkenSteel shall be entitled to all Refunds of Taxes with respect to which TimkenSteel would be liable for payment under Article 3 if such Taxes were paid after the Distribution Date. A Party receiving a Refund to which the other Party is entitled pursuant to this Agreement shall pay to the other Party the amount to which such other Party is entitled within 10 days after the receipt of the Refund.

Exhibit 10.1

(b) Notwithstanding Section 4.01(a), to the extent that a Party applies or causes to be applied an overpayment of Taxes as a credit toward or a reduction in Taxes otherwise payable by such Party (or a Taxing Authority requires such application in lieu of a Refund) and such overpayment of Taxes, if received as a Refund, would have been payable by such Party to the other Party pursuant to this Section 4.01, such Party shall pay such amount to the other Party no later than the Due Date of the Tax Return for which such overpayment is applied to reduce Taxes otherwise payable.

(c) In the event of an Adjustment relating to Taxes for which one Party is or may be liable pursuant to Article 3 would have given rise to a Refund but for an offset against the Taxes for which the other Party is or may be liable pursuant to Article 3 (the “Benefited Party”), then the Benefited Party shall pay to the other Party within 10 days of the Final Determination of such Adjustment an amount equal to the lesser of (a) the amount of such hypothetical Refund or (b) the amount of such reduction in the Taxes of the Benefited Party, in each case plus interest at the rate set forth in Section 6621(a)(1) of the Code on such amount for the period from the filing date of the Tax Return that would have given rise to such Refund to the payment date to the other Party.

(d) To the extent that the amount of any Refund under this Section 4.01 is later reduced by a Taxing Authority or as the result of a Tax Proceeding, such reduction shall be allocated to the Party that was entitled to such Refund pursuant to this Section 4.01 and an appropriate adjusting payment shall be made by such Party to the other Party if the other Party originally paid the Refund to such Party. For the avoidance of doubt, this Section 4.01(d) is intended to make whole the other Party that was not entitled to the Refund.

Section 4.02 Carrybacks.

(a) Subject to Timken’s discretion to file an amended Tax return under Section 4.03, each Party is permitted (but not required) to carry back (or to cause its Subsidiaries to carry back) a loss, credit, or other Tax Attribute realized in a Post-Closing Period or a Straddle Period to a Pre-Closing Period or a Straddle Period; provided, however, that if such carryback would reasonably be expected to adversely impact the other Party (including through an increase in Taxes or a loss or reduction in the utilization of a loss, credit, or other Tax Attribute regardless of whether or when such loss, credit, or other Tax Attribute otherwise would have been used), such carryback shall not be permitted without first obtaining the prior written consent of such other Party, which consent shall not be unreasonably withheld or delayed.

Exhibit 10.1

(b) Refunds for Carrybacks.

(i) Subject to Sections 4.02(c) and 4.02(d), in the event that any member of the TimkenSteel Group chooses to (or is required to under applicable Law), and is permitted to under Sections 4.02(a) and 4.03, carry back a loss, credit, or other Tax Attribute to a Mixed Business Tax Return, Timken shall cooperate with TimkenSteel and such member in seeking from the appropriate Taxing Authority any Refund that reasonably would result from a permitted carryback (including by filing an amended Tax Return at TimkenSteel’s cost and expense). TimkenSteel (or such member) shall be entitled to any Refund realized by any member of the Timken Group or TimkenSteel Group as a result of the carryback.

(ii) Subject to Sections 4.02(c) and 4.02(d), in the event that any member of the Timken Group chooses to (or is required to under applicable Law), and is permitted to under Sections 4.02(a) and 4.03, carry back a loss, credit, or other Tax Attribute to a Mixed Business Tax Return, TimkenSteel shall cooperate with Timken and such member in seeking from the appropriate Taxing Authority any Refund that reasonably would result from a permitted carryback (including by filing an amended Tax Return at Timken’s cost and expense). Timken shall be entitled to any Refund realized by any member of the TimkenSteel Group or Timken Group as a result of the carryback.

(c) Except as otherwise provided by applicable Law, if any loss, credit or other Tax Attribute of the Bearings Business and the Steel Business both would be eligible to be carried back or carried forward to the same Pre-Closing Period or Straddle Period (had such carryback been the only carryback to such taxable period) (such amount for each of Bearings Business and the Steel Business separately referred to as the “Carryback Amount” and the sum of both amounts returned to as the “Aggregate Carryback Amount”), any Refund resulting therefrom shall be allocated between Timken and TimkenSteel proportionately based on the ratio of the Bearings Business Carryback Amount to the Aggregate Carryback Amount and the Steel Business Carryback Amount to the Aggregate Carryback Amount, respectively. Appropriate adjustments to the allocation of any Refund under the preceding sentence shall be made if the carryback results in any additional Tax Attributes being allocated to the Timken Group or the TimkenSteel Group (for example, under the regulations applicable to U.S. federal consolidated income tax returns) to the extent necessary to cause the Timken Group, on the one hand, and the TimkenSteel Group, on the other hand, to proportionately benefit from such carryback.

Exhibit 10.1

(d) To the extent the amount of any Refund under this Section 4.02 is later reduced by a Taxing Authority or a Tax Proceeding, such reduction shall be allocated to the Party to which such Refund was allocated pursuant to this Section 4.02.

Section 4.03 Amended Tax Returns.

(a) Mixed Business Tax Returns. Timken shall, in its sole discretion, be permitted to amend, or to cause TimkenSteel or any TimkenSteel Entity to amend (and TimkenSteel shall, if Timken so chooses, amend or cause the applicable TimkenSteel Entity to amend), any Mixed Business Tax Return; provided, however, that unless otherwise required by a Final Determination, Timken shall not be permitted to so amend any such Mixed Business Tax Return to the extent that any such amendment or filing (i) would reasonably be expected to materially adversely impact TimkenSteel (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether or when such Tax Attribute otherwise would have been used), (ii) would be inconsistent with historical practice, or (iii) would be inconsistent with the Opinion or Tax Representation Letter, in each case without the prior written consent of TimkenSteel, which consent shall not be unreasonably withheld or delayed. If requested in writing by TimkenSteel at least 60 days prior to the expiration of the applicable statute of limitations, Timken shall amend any Mixed Business Tax Return to reflect changes proposed by TimkenSteel; provided, however, that TimkenSteel shall reimburse Timken for all reasonable out-of-pocket costs and expenses incurred by Timken in amending such Mixed Business Tax Return; provided, further, that unless otherwise required by a Final Determination, Timken shall not be required to so amend any such Mixed Business Tax Return to the extent that any such amendment (A) would reasonably be expected to materially adversely impact Timken (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether or when such Tax Attribute otherwise would have been used), (B) would be inconsistent with historical practice, or (C) would be inconsistent with the Opinion or Tax Representation Letter.

(b) Single Business Tax Returns.

(i) Timken. Timken shall, in its sole discretion, be permitted to amend (or cause or permit to be amended) any Single Business Tax Return relating to the Bearings Business.

(ii) TimkenSteel. TimkenSteel shall, in its sole discretion, be permitted to amend (or cause or permit to be amended) any Single Business Tax Return relating to the Steel Business.

Section 4.04 Tax Attributes.

Exhibit 10.1

(a) Tax Attributes arising in a Pre-Closing Period will be allocated to (and the benefits and burdens of such Tax Attribute will inure to) the Timken Group and the TimkenSteel Group in accordance with historical practice (including historical methodologies for making corporate allocations), the Code, Treasury Regulations, and any applicable state, local and foreign Law. For the avoidance of doubt, the CAT Credit will be allocated in the manner agreed to by the State of Ohio. Timken and TimkenSteel shall jointly determine the allocation of such Tax Attributes arising in Pre-Closing Periods as soon as reasonably practicable following the Distribution Date, and shall compute all Taxes for a Post-Closing Period and Straddle Period consistently with that determination unless otherwise required by a Final Determination.

(b) Except as otherwise provided herein, to the extent that the amount of any Tax Attribute is later reduced or increased by a Taxing Authority or as a result of a Tax Proceeding, such reduction or increase shall be allocated to the Party to which such Tax Attribute was allocated pursuant to Section 4.04(a).

(c) Notwithstanding anything to the contrary in this Agreement, Timken shall at all times be entitled to any Tax deduction or credit, as the case may be, relating to (i) the exercise of Timken Common Shares compensatory stock options, (ii) restricted stock that has vested (in whole or in part) on or prior to the Distribution Date, or (iii) restricted stock with respect to Timken Common Shares. TimkenSteel shall be entitled to any Tax deduction or credit, as the case may be, relating to (A) the exercise of TimkenSteel Common Shares compensatory stock options or (B) restricted stock with respect to TimkenSteel Common Shares. To the extent any Tax deduction that is described in either of the first two sentences of this Section 4.04(c) and claimed by the Party to whom the deduction is allocated under this section 4.04(c) is disallowed to such Party and a Taxing Authority makes a determination that the other Party is entitled to such deduction, the Party denied such deduction shall notify the other Party of the receipt of such determination, promptly after receipt thereof, and the Party for which the determination allows the Tax deduction shall pay to the other Party the amount of the Tax Benefit arising therefrom.

ARTICLE V.

TAX PROCEEDINGS

Exhibit 10.1

Section 5.01 Notification of Tax Proceedings. Within 10 days after a Controlling Party (or its Subsidiary) becomes aware of the commencement of a Tax Proceeding that may give rise to Taxes for which an Interested Party is responsible pursuant to Article 3, such Controlling Party shall provide notice to the Interested Party of such Tax Proceeding, and thereafter shall promptly forward or make available to the Interested Party copies of notices and communications relating to such Tax Proceeding. The failure of the Controlling Party to provide notice to the Interested Party of the commencement of any such Tax Proceeding within such 10-day period or promptly forward any further notices or communications shall not relieve the Interested Party of any obligation which it may have to the Controlling Party under this Agreement except to the extent that the Interested Party is actually prejudiced by such failure.

Exhibit 10.1

Section 5.02 Tax Proceeding Procedures. The Controlling Party, in its sole discretion, and at its own expense, shall be entitled to control, administer, contest, litigate, compromise and settle any Adjustment proposed, asserted or assessed pursuant to any Tax Proceeding and any such actions taken by the Controlling Party shall be made diligently and in good faith; provided that the Controlling Party shall (a) keep the Interested Party informed in a timely manner of all actions proposed to be taken by the Controlling Party and shall permit the Interested Party to comment in advance on the Controlling Party’s oral or written submissions with respect to such Tax Proceeding, (b) prepare all correspondence or filings to be submitted to any Taxing Authority or judicial authority in a manner consistent with the Tax Return, which is the subject of such Adjustment, as filed and timely provide the Interested Party with copies of any such correspondence or filings for the Interested Party’s prior review and comment and (c) provide the Interested Party with written notice reasonably in advance of, and the Interested Party shall have the right to attend and participate in, any formally scheduled meetings with any Taxing Authority or hearings or proceedings before any judicial authority with respect to such Adjustment. Furthermore, the Controlling Party may not settle or otherwise resolve a Tax Proceeding with respect to an Adjustment that would reasonably be expected to impact the Tax liability of an Interested Party without the consent of such Interested Party, such consent not to be unreasonably withheld; provided that the Controlling Party shall be permitted to settle or otherwise resolve a Tax Proceeding if and when the only unsettled issue of such Tax Proceeding relates to an Adjustment for which an Interested Party has consent rights pursuant to the previous clause, but has not consented to settlement.

Section 5.03 Tax Proceeding Cooperation. Each Party shall act in good faith and use its reasonable best efforts to cooperate fully with the other Party (and its Subsidiaries) in connection with such Tax Proceeding and shall provide or cause its Subsidiaries to provide such information to each other as may be necessary or useful with respect to such Tax Proceeding in a timely manner, identify and provide access to potential witnesses, and other persons with knowledge and other information within its control and reasonably necessary to the resolution of the Tax Proceeding.

ARTICLE VI.

Exhibit 10.1

TAX-FREE STATUS OF THE TRANSACTIONS

Section 6.01 Representations and Warranties.

(i) it has examined (A) the Opinion, (B) the Tax Representation Letter, and (C) any other materials delivered or deliverable by Timken or TimkenSteel in connection with the rendering by Counsel of the Opinion (all of the foregoing, collectively, the “Tax Materials”) ;

(ii) the facts presented and the representations made therein, to the extent descriptive of the TimkenSteel Group (including the business purposes for the Distribution as described in the Opinion and the other Tax Materials to the extent that they relate to the TimkenSteel Group and the plans, proposals, intentions and policies of the TimkenSteel Group), are, or will be from the time presented or made through and including the Distribution Date and thereafter as relevant, true, correct and complete in all respects ;

(iii) it knows of no fact (after due inquiry) that may negate the Tax-Free Status of the Transactions ; and

(iv) neither it, nor any of its Subsidiaries, has any plan or intent to take any action which is inconsistent with any statements or representations made in the Tax Materials.

(d) Timken. Timken hereby represents and warrants or covenants and agrees, as appropriate, that:

(i) it has examined the Tax Materials ;

(ii) it has delivered complete and accurate copies of the Tax Materials to TimkenSteel, and the facts presented and the representations made therein, to the extent descriptive of the Timken Group (including the business purposes for the Distribution as described in the Opinion, and the other Tax Materials to the extent that they relate to the Timken Group and the plans, proposals, intentions and policies of the Timken Group), are, or will be from the time presented or made through and including the Distribution Date and thereafter as relevant, true, correct and complete in all respects ;

Exhibit 10.1

(iii) it knows of no fact (after due inquiry) that may negate the Tax-Free Status of the Transactions ; and

(iv) neither it, nor any of its Subsidiaries, has any plan or intent to take any action which is inconsistent with any statements or representations made in the Tax Materials.

Section 6.02 Limits on Proposed Acquisition Transactions and Other Transactions During Restriction Period.

(d) During the Restriction Period, Timken and TimkenSteel:

(i) shall continue and cause to be continued the active conduct of the Bearings Business and the Steel Business, in each case taking into account Section 355(b)(3) of the Code and as conducted immediately prior to the Distribution;

(ii) shall not voluntarily dissolve, liquidate, or partially liquidate (including any action that is treated as a liquidation for federal income Tax purposes);

(iii) shall not enter into any Proposed Acquisition Transaction or, approve any Proposed Acquisition Transaction, or permit any Proposed Acquisition Transaction to occur;

(iv) shall not redeem or otherwise repurchase (directly or through an Affiliate) any stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48 (provided, however, that the fact that any such redemption or repurchase satisfies Section 4.05(1)(b) of Revenue Procedure 96-30 shall not prevent such redemption or repurchase from being considered, or taken into account for purposes of another transaction constituting, a Proposed Acquisition Transaction, in which case clause (iii) shall apply);

(v) shall not amend its articles of incorporation (or other organizational documents), or take any other action or approve or permit the taking of any action, whether through a stockholder vote or otherwise, affecting the relative voting rights of the common shares (including through the conversion of any common shares into another class of capital stock);

(vi) shall not issue shares of a new class of nonvoting stock;

(vii) shall not merge or consolidate with any other Person; provided, however, that if Timken or TimkenSteel acquires equity of another Person in a

Exhibit 10.1

transaction that is not otherwise described in clauses (i) through (vi), (viii), or (ix) of this Section 6.02(a), then the merger or consolidation of such Person with and into Timken or TimkenSteel (with Timken or TimkenSteel surviving), as applicable, shall not constitute a merger or consolidation described in this clause (vii);

(viii) shall not sell, transfer, or otherwise dispose of or agree to, sell, transfer or otherwise dispose of (including in any transaction treated for U.S. federal income Tax purposes as a sale, transfer or disposition, and including any sale, transfer or other disposition to an Subsidiary or otherwise) assets (including, any shares of common shares of a Subsidiary) that, in the aggregate, constitute more than 35% of its consolidated gross or net assets. The foregoing sentence shall not apply to (A) sales, transfers, or dispositions of assets in the Ordinary Course of Business, (B) any cash paid to acquire assets from an unrelated Person in an arm’s-length transaction, (C) any assets transferred to a Person that is disregarded as an entity separate from the transferor for U.S. federal income Tax purposes or (D) any mandatory or optional repayment (or pre-payment) of any indebtedness of such company. The percentages of consolidated gross and net assets sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross or net assets, as the case may be, of Timken and TimkenSteel, as applicable, as of the Distribution Date. For purposes of this Section 6.02(a)(viii), a merger of Timken or TimkenSteel with and into any Person shall constitute a disposition of all of the assets of Timken or TimkenSteel, respectively; and

(ix) shall not take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Tax Materials) which in the aggregate (and taking into account any other transactions described in this Section 6.02(a)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty-Percent or Greater Interest in Timken or TimkenSteel or otherwise jeopardize the Tax-Free Status of the Transactions.

(e) Notwithstanding the restrictions imposed by Section 6.02(a), during the Restriction Period, Timken and TimkenSteel shall be permitted to take such action or one or more actions set forth in the foregoing clauses (i) through (ix), if, prior to taking any such actions, the Party taking the action (the “Acting Party”) set forth in the foregoing clauses (i) through (ix) shall (1) have received a favorable private letter ruling from the IRS, or a ruling from another appropriate Taxing Authority that confirms that such action or actions will not affect the Tax-Free Status of the Transactions, taking into account such actions and any other relevant transactions in the aggregate (a “Post-

Exhibit 10.1

Distribution Ruling”), in form and substance satisfactory to the other Party (the “Non-Acting Party”), or (2) have received an Unqualified Tax Opinion that confirms that such action or actions will not affect the Tax-Free Status of the Transactions, or (3) the Non-Acting Party shall have waived in writing the requirement to obtain such ruling or opinion. In determining whether a ruling or opinion is satisfactory, the Non-Acting Party shall exercise its discretion, in good faith, solely to preserve the Tax-Free Status of the Transactions and may consider, among other factors, the appropriateness of any underlying assumptions or representations used as a basis for the ruling or opinion and the Non-Acting Party’s views on the substantive merits of such ruling or opinion. The Acting Party shall provide a copy of the Post-Distribution Ruling or the Unqualified Tax Opinion described in this paragraph to the Non-Acting Party as soon as practicable prior to taking or failing to take any action set forth in the foregoing clause (i) through (ix). The Acting Party shall bear all costs and expenses of securing any such Post-Distribution Ruling or Unqualified Tax Opinion and shall reimburse the Non-Acting Party for all reasonable out-of-pocket costs and expenses that the Non-Acting Party may incur in good faith in seeking to obtain or evaluate any such Post-Distribution Ruling or Unqualified Tax Opinion.

Exhibit 10.1

Section 6.03 Section 336(e) Elections. Pursuant to Treasury Regulation sections 1.336-2(h)(1)(i) and 1.336-2(j), Timken and TimkenSteel agree that Timken shall make a timely protective election under Section 336(e) of the Code and the Treasury Regulations issued thereunder for TimkenSteel and each TimkenSteel Affiliate that is a domestic corporation for U.S. federal income Tax purposes with respect to the Distribution (a “Section 336(e) Election”). It is intended that a Section 336(e) Election will have no effect unless the Distribution is a “qualified stock disposition,” as defined in Treasury Regulation section 1.336(e)-1(b)(6), either because (a) the Distribution is not a transaction described in Treasury Regulations section 1.336-1(b)(5)(i)(B) or (b) Treasury Regulation Section 1.336-1(b)(5)(ii) applies to the Distribution. If and to the extent that there is a violation of the Tax-Free Status of the Transaction, and the resulting Taxes (including any Taxes attributable to the Section 336(e) Election) are considered Timken Taxes (rather than TimkenSteel Taxes), then, to that extent, Timken shall be entitled to quarterly payments from TimkenSteel equal to the actual Tax savings arising from the step-up in Tax basis resulting from the Section 336(e) Election, determined using a “with and without” methodology (treating any deductions or amortization attributable to the step-up in tax basis resulting from the Section 336(e) Election as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryforwards), and less a reasonable charge for administrative expenses necessary to secure the Tax savings.

ARTICLE VII.

COOPERATION

Section 7.01 General Cooperation.

Exhibit 10.1

(f) The Parties shall each cooperate fully (and each shall cause its respective Subsidiaries to cooperate fully) with all reasonable requests in writing (“Information Request”) from another Party hereto, or from an agent, representative or advisor to such Party, in connection with the preparation and filing of Tax Returns (including the preparation of Tax Packages), claims for Refunds, Tax Proceedings, and calculations of amounts required to be paid pursuant to this Agreement, in each case, related or attributable to or arising in connection with Taxes of any of the Parties or their respective Subsidiaries covered by this Agreement and the establishment of any reserve required in connection with any financial reporting (a “Tax Matter”). Such cooperation shall include the provision of any information reasonably necessary or helpful in connection with a Tax Matter (“Information”) and shall include, without limitation, at each Party’s own cost:

(i) the provision of any Tax Returns of the Parties and their respective Subsidiaries, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to such Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;

(ii) the execution of any document (including any power of attorney) in connection with any Tax Proceedings of any of the Parties or their respective Subsidiaries, or the filing of a Tax Return or a Refund claim of the Parties or any of their respective Subsidiaries;

(iii) the use of the Party’s reasonable best efforts to obtain any documentation in connection with a Tax Matter; and

(iv) the use of the Party’s reasonable best efforts to obtain any Tax Returns (including accompanying schedules, related work papers, and documents), documents, books, records or other information in connection with the filing of any Tax Returns of any of the Parties or their Subsidiaries.

Each Party shall make its employees, advisors, and facilities available, without charge, on a reasonable and mutually convenient basis in connection with the foregoing matters.

Exhibit 10.1

Section 7.02 Retention of Records. Timken and TimkenSteel shall retain or cause to be retained all Tax Returns, schedules and workpapers, and all material records or other documents relating thereto in their possession, until 60 days after the expiration of the applicable statute of limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other documents relate or until the expiration of any additional period that any Party reasonably requests, in writing, with respect to specific material records or documents. A Party intending to destroy any material records or documents shall provide the other Party with reasonable advance notice and the opportunity to copy or take possession of such records and documents. The Parties hereto will provide notice to each other in writing of any waivers or extensions of the applicable statute of limitations that may affect the period for which the foregoing records or other documents must be retained.

ARTICLE VIII.

MISCELLANEOUS

Section 8.01 Dispute Resolution.

(a) Except as otherwise provided herein, in the event of any dispute between the Parties as to any matter covered by this Agreement, the dispute shall be governed exclusively by the procedures set forth in Section 8.01(b).

(b) With respect to any dispute governed by this Section 8.01(b), the Parties shall appoint a nationally recognized independent public accounting firm (the “Accounting Firm”) to resolve such dispute. In this regard, the Accounting Firm shall make determinations with respect to the disputed items based solely on representations made by Timken and TimkenSteel and their respective representatives, and not by independent review, and shall function only as an expert and not as an arbitrator and shall be required to make a determination in favor of one Party only. The Parties shall require the Accounting Firm to resolve all disputes no later than 45 days after the submission of such dispute to the Accounting Firm, but in no event later than the Due Date for the payment of Taxes or the filing of the applicable Tax Return, if applicable, and agree that all decisions by the Accounting Firm with respect thereto shall be final and conclusive and binding on the Parties. The Accounting Firm shall resolve all disputes in a manner consistent with this Agreement and, to the extent not inconsistent with this Agreement, in a manner consistent with the historical practices of Timken and its Subsidiaries, except as otherwise required by applicable Law. The Parties shall

Exhibit 10.1

require the Accounting Firm to render all determinations in writing and to set forth, in reasonable detail, the basis for such determination. The fees and expenses of the Accounting Firm shall be paid by the non-prevailing Party.

Exhibit 10.1

Section 8.02 Tax Sharing Agreements. All Tax sharing, indemnification and similar agreements, written or unwritten, as between Timken, on the one hand, and TimkenSteel or a TimkenSteel Entity, on the other (other than this Agreement), shall be or shall have been terminated no later than the effective time of the Distribution and, after the effective time of the Distribution, none of Timken, TimkenSteel or a TimkenSteel Entity shall have any further rights or obligations under any such Tax sharing, indemnification or similar agreement.

Section 8.03 Interest on Late Payments. With respect to any payment between the Parties pursuant to this Agreement not made by the due date set forth in this Agreement for such payment, the outstanding amount will accrue interest at a rate equal to the rate of interest from time to time announced publicly by The Wall Street Journal as its prime rate, calculated on the basis of a year of 365 days and the number of days elapsed.

Section 8.04 Survival of Covenants. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date and remain in full force and effect in accordance with their applicable terms, provided, however, that the representations and warranties and all indemnification for Taxes shall survive until 90 days following the expiration of the applicable statute of limitations (taking into account all extensions thereof), if any, of the Tax that gave rise to the indemnification, provided, further, that, in the event that notice for indemnification has been given within the applicable survival period, such indemnification shall survive until such time as such claim is finally resolved.

Section 8.05 Termination. Notwithstanding any provision to the contrary, this Agreement may be terminated by the board of directors of Timken, in its sole and absolute discretion, at any time prior to the Distribution. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any member of its Group or any of its respective directors or officers) will have any liability or further obligation to the other Party (or member of its Group) with respect to this Agreement. After the Distribution Date, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.

Exhibit 10.1

Section 8.06 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained in this Agreement.

Section 8.07 Entire Agreement. Except as otherwise expressly provided in this Agreement, this Agreement and any annexes, exhibits, schedules and appendices hereto constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the Parties with respect to the subject matter of this Agreement. This Agreement will not be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby other than those expressly set forth in this Agreement or in any document required to be delivered hereunder. Notwithstanding any oral agreement or course of action of the Parties or their representatives to the contrary, no Party to this Agreement will be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement and the Separation Agreement, as applicable, will have been executed and delivered by each of the Parties. Except as specifically set forth in the Separation Agreement and the Employee Matters Agreement, and except as provided in Section 8.15, all matters related to Taxes or Tax Returns of the Parties and their respective Subsidiaries shall be governed exclusively by this Agreement. Except as provided in Section 8.15, in the event of a conflict between this Agreement and the Separation Agreement or the Employee Matters Agreement with respect to such matters, this Agreement shall govern and control.

Exhibit 10.1

Section 8.08 Assignment. Except as expressly provided in this Agreement, neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any Party without the prior written consent of the other Party, and any such assignment or delegation without such prior written consent will be null and void. If any Party to this Agreement (or any of its successors or permitted assigns) (a) will consolidate with or merge into any other Person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (b) will transfer all or substantially all of its properties and/or assets to any Person, then, and in each such case, the Party (or its successors or permitted assigns, as applicable) will ensure that such Person assumes all of the obligations of such Party (or its successors or permitted assigns, as applicable) under this Agreement, in which case the consent described in the previous sentence will not be required.

Section 8.09 No Third-Party Beneficiaries. Except as provided in Article 3 with respect to the TimkenSteel Group and the Timken Group, nothing in this Agreement, express or implied, is intended to or will confer upon any Person other than the Parties and their respective Subsidiaries and their respective successors and permitted assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

Section 8.10 Specific Performance. Subject to the provisions of Section 8.01, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by the Parties.

Exhibit 10.1

Section 8.11 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing expressly designated as an amendment hereto, signed on behalf of each Party hereto.

Exhibit 10.1

Section 8.12 Waiver. No failure or delay of either Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties (and the other members of their respective Groups) under this Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder. Any agreement on the part of any Party to any such waiver will be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

Section 8.13 Rules of Construction. Interpretation of this Agreement shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, clause, Exhibit and Schedule are references to the Articles, Sections, paragraphs, clauses, exhibits and schedules of this Agreement unless otherwise specified; (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement, including any Schedules or Exhibits hereto; (d) references to “$” shall mean U.S. dollars; (e) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) references to “written” or “in writing” include in electronic form; (h) provisions shall apply, when appropriate, to successive events and transactions; (i) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (j) Timken and TimkenSteel have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (k) a reference to any Person includes such Person’s successors and permitted assigns.

Exhibit 10.1

Section 8.14 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of any such Agreement.

Section 8.15 Coordination with the Contribution Agreement, Separation Agreement or Employee Matters Agreement. To the extent any conflict arises between this Agreement and the Contribution Agreement or Separation Agreement, this Agreement shall control. To the extent any covenants or agreements between the Parties with respect to employee withholding Taxes are set forth in the Employee Matters Agreement, such Taxes shall be governed exclusively by the Employee Matters Agreement and not by this Agreement.

Section 8.16 Effective Date. This Agreement shall become effective only upon the occurrence of the Distribution.

Section 8.17 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby will be governed by, and construed in accordance with, the Laws of the State of Ohio, without regard to the conflicts of law rules thereof.

Section 8.18 Force Majeure. Neither Party hereto (nor any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) notify the other Party of the nature and extent of any such Force Majeure condition and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as feasible.

Exhibit 10.1

Section 8.19 Notices. All notices and other communications under this Agreement will be in writing and will be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first business day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder will be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to Timken:

The Timken Company

4500 Mount Pleasant Street NW

North Canton, Ohio 44720-5450

Attention: Senior Vice President and General Counsel

Facsimile: 234-262-4249

If to TimkenSteel:

TimkenSteel Corporation

1835 Dueber Avenue, S.W.

Canton, Ohio 44706-2798

Attention: General Counsel

Facsimile: 330-471-4041

Exhibit 10.1

Section 8.20 No Circumvention. Each Party agrees not to directly or indirectly take any actions, act in concert with any Person who takes any action, or cause or allow any of its Subsidiaries to take any actions (including the failure to take any reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement (including adversely affecting the rights or ability of any Party to successfully pursue indemnification or payment pursuant to the provisions of this Agreement).

Section 8.21 No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer or impose upon any Party a duplicative right, entitlement, obligation, or recovery with respect to any matter arising out of the same facts and circumstances.

[The remainder of this page is intentionally left blank.]

Exhibit 10.1

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

THE TIMKEN COMPANY

By: /s/ Philip D. Fracassa____________

Name: Philip D. Fracassa

Title: Chief Financial Officer

TIMKENSTEEL CORPORATION

By: /s/ Christopher J. Holding_________

Name: Christopher J. Holding

Title: Executive Vice President and Chief Financial Officer

[Signature Page to Tax Sharing Agreement]

Exhibit 10.2

EMPLOYEE MATTERS AGREEMENT

between

THE TIMKEN COMPANY

and

TIMKENSTEEL CORPORATION

Dated as of June 30, 2014

TABLE OF CONTENTS


ARTICLE I	DEFINITIONS 1


Section 1.1	Certain Defined Terms 1


Section 1.2	Other Capitalized Terms 10


ARTICLE II	GENERAL PRINCIPLES; EMPLOYEE TRANSFERS 10


Section 2.1	Bearings Group Employee Liabilities 10


Section 2.2	TimkenSteel Group Employee Liabilities 11


Section 2.3	Bearings Benefit Plans/TimkenSteel Benefit Plans 11


Section 2.4	Employee Transfers 11


Section 2.5	Collective Bargaining Agreements 12


ARTICLE III	NON-U.S. EMPLOYEE TRANSFERS and benefit plans 12


Section 3.1	UK Pension 12


Section 3.2	IRBP 13


Section 3.3	Mexico Pension 13


ARTICLE IV	SERVICE CREDIT 13


Section 4.1	Service Credit for Employee Transfers 13


ARTICLE V	LITIGATION AND COMPENSATION 14


Section 5.1	Employee-Related Litigation 14


Section 5.2	Vacation 15


Section 5.3	Annual Bonuses 15


Section 5.4	Employment Agreements 16


Section 5.5	Repayment Agreements 16


ARTICLE VI	CERTAIN WELFARE BENEFIT PLAN MATTERS 16


Section 6.1	TimkenSteel Spinoff Welfare Plans 16


Section 6.2	Continuation of Elections 18


Section 6.3	Deductibles and Other Cost-Sharing Provisions 18


Section 6.4	Flexible Spending Account Treatment 19


Section 6.5	Workers’ Compensation 20


Section 6.6	COBRA 20


Section 6.7	Timken VEBA 21


ARTICLE VII	TAX-QUALIFIED DEFINED BENEFIT PLANS 21


Section 7.1	TimkenSteel Spinoff DB Plans 21


Section 7.2	Continuation of Elections 23


Section 7.3	Delayed Transfer Employees 23


ARTICLE VIII	U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS 23


Section 8.1	TimkenSteel Spinoff DC Plans 23


Section 8.2	Continuation of Elections 24


Section 8.3	Assumed DC Plans 25


Section 8.4	Contributions Due 25


ARTICLE IX	NONQUALIFIED RETIREMENT PLANS 25


Section 9.1	TimkenSteel Spinoff Nonqualified Plans 25


Section 9.2	No Distributions on Separation 26


Section 9.3	Section 409A 27

-i-

TABLE OF CONTENTS


Section 9.4	Continuation of Elections 27


Section 9.5	Delayed Transfer Employees 27


Section 9.6	Timken Director Plan 27


ARTICLE X	TIMKEN EQUITY COMPENSATION AWARDS 27


Section 10.1	Outstanding Timken Equity Compensation Awards 27


Section 10.2	Conformity with Non-U.S. Laws 32


Section 10.3	Tax Withholding and Reporting 32


Section 10.4	Employment Treatment 32


Section 10.5	Payment of Option Exercise Prices 33


Section 10.6	Dividends/Dividend Equivalents 33


Section 10.7	Equity Award Administration 34


Section 10.8	Registration 34


ARTICLE XI	BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD- PARTY CLAIMS 34


Section 11.1	General Principles 34


Section 11.2	Benefit Plan Third-Party Claims 34


ARTICLE XII	INDEMNIFICATION 34


Section 12.1	Indemnification 34


ARTICLE XIII	COOPERATION 34


Section 13.1	Cooperation 34


ARTICLE XIV	MISCELLANEOUS 35


Section 14.1	Vendor Contracts 35


Section 14.2	Further Assurances 35


Section 14.3	Employment Taxes Withholding Reporting Responsibility 35


Section 14.4	Data Privacy 35


Section 14.5	Third Party Beneficiaries 36


Section 14.6	Effect if Distribution Does Not Occur 36


Section 14.7	Incorporation of Separation Agreement Provisions 36


Section 14.8	No Representation or Warranty 36

Schedule 5.4: Employment Agreements

Schedule 6.1(a): Split Retiree Welfare Plans

Schedule 6.1(b): Split Welfare Plans


Schedule 7.1(a):	Split DB Plans


Schedule 8.1(a):	Split DC Plans


Schedule 8.3:	Assumed DC Plans


Schedule 9.1(a):	Split Nonqualified Plans


Schedule 9.1(c):	TimkenSteel Excess Benefit Agreements

-ii-

Exhibit 10.2

EMPLOYEE MATTERS AGREEMENT

EMPLOYEE MATTERS AGREEMENT, dated as of June 30, 2014 (this “Employee Matters Agreement”), between The Timken Company, an Ohio corporation (“Timken”), and TimkenSteel Corporation, an Ohio corporation and a preexisting, wholly owned subsidiary of Timken (“TimkenSteel”).

RECITALS

A. The parties to this Employee Matters Agreement have entered into the Separation and Distribution Agreement (the “Separation Agreement”), dated as of the date hereof, pursuant to which Timken intends to distribute to its shareholders, on a pro rata basis, all the outstanding common shares, without par value, of TimkenSteel then owned by Timken (the “Distribution”).

B. The parties wish to set forth their agreements as to certain matters regarding the treatment of, and the compensation and employee benefits provided to, current and former employees of Timken and TimkenSteel and their Subsidiaries.

C. This Employee Matters Agreement incorporates the agreement of the parties with regard to certain assets and liabilities that were separated prior to the Distribution, which agreement was originally set forth in the Benefit Plan Transfer Agreement, effective as of May 1, 2014.

AGREEMENT

In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 Certain Defined Terms. For the purposes of this Employee Matters Agreement:

“2012 Performance-Based RSU” means a Timken Performance-Based RSU granted during the 2012 calendar year.

“2013 Performance-Based RSU” means a Timken Performance-Based RSU granted during the 2013 calendar year.

“2014 SEMPP Award” has the meaning set forth in Section 5.3(b).

“APA” has the meaning set forth in Section 5.3(a).

-1-

Exhibit 10.2

“Applicable Transfer Date” means the date on which a Delayed Transfer Employee actually commences employment with the TimkenSteel Group or the Bearings Group (as applicable).

“Assumed DC Plans” has the meaning set forth in Section 8.3(a).

“Bearings Benefit Plans” means (i) the Split DB Plans, the Split Retiree Welfare Plans, and the Timken VEBA, and (ii) any other Benefit Plan that, as of the close of business on the day before the Distribution Date, is sponsored or maintained solely by any member of the Bearings Group. Bearings Benefit Plan will also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the Bearings Group contributes for the benefit of its employees. For the avoidance of doubt, no member of the Bearings Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to TimkenSteel any reimbursement in respect of such Benefit Plan.

“Bearings Non-U.S. Benefit Plans” means the Non-U.S. Benefit Plans sponsored or maintained by a member of the Bearings Group.

“Bearings Deferred Share” means a deferred share award with respect to Timken Common Shares relating to a Timken Deferred Share described in Section 10.1(a)(ii)(B).

“Bearings Employee” means each individual who, as of the close of business on the Distribution Date, is employed by a member of the Bearings Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). Bearings Employees also include Bearings Transferees, effective as of the Applicable Transfer Date. Notwithstanding the foregoing, the phrase “Distribution Date” in the first sentence of this definition will be deemed to read “Plan Split Date” and Bearings Employees will not include any TimkenSteel Employees, in each case, (i) for the purpose of allocating Liability with respect to the Split DB Plans, Split Retiree Welfare Plans, and Timken VEBA under Section 5.1(a) and (ii) for all purposes under Article VII and Sections 3.3, 6.1(a), 6.2(a), 6.3(a), and 6.7.

“Bearings Equity Compensation Award” means each Bearings Option, Bearings Performance Share, Bearings Restricted Share, Bearings Deferred Share, and Bearings Time-Based RSU.

“Bearings Flexible Account Plan” has the meaning set forth in Section 6.4.

“Bearings Option” means an option to acquire Timken Common Shares relating to a Timken Option described in Section 10.1(a)(i).

“Bearings Performance Share” means a performance share award with respect to Timken Common Shares relating to Timken Performance Shares described in Section 10.1(a)(iii).

-2-

Exhibit 10.2

“Bearings Price” means the Option Exercise Price multiplied by a fraction, (a) the numerator of which is the average of the high and low sale price of a Timken Common Share solely on the New York Stock Exchange on the Trading Day immediately following the Distribution Date (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto and (b) the denominator of which is the average of the high and low sale price of a Timken Common Share solely on the New York Stock Exchange on the Distribution Date (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto.

“Bearings Restricted Share” means a restricted Timken Common Share relating to Timken Restricted Shares described in Section 10.1(a)(ii)(A).

“Bearings Time-Based RSU” means a restricted stock unit award with respect to Timken Common Shares relating to Timken Time-Based RSUs described in Section 10.1(a)(ii)(C) that vests based solely on the passage of time.

“Bearings Transferees” means the Delayed Transfer Employees who transfer from the TimkenSteel Group to the Bearings Group.

“Bearings Welfare Plan” means each Bearings Benefit Plan that is a Welfare Plan, other than the Split Retiree Welfare Plans.

“Benefit Plan” means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees in the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no Timken Equity Compensation Award, nor any plan under which any such Timken Equity Compensation Award is granted, will constitute a “Benefit Plan” under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Benefit Plan for purposes hereof. For the avoidance of doubt, Excess Benefit Agreements between Timken (or TimkenSteel) and certain employees will be considered Benefit Plans.

“COBRA” means the continuation coverage requirements under Code Section 4980B and ERISA Sections 601-608.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collective Bargaining Agreement” means any collective bargaining agreement, labor agreement, pension and insurance agreement, 401(k) agreement, SUB agreement or other written agreement to which Timken, TimkenSteel, or any of their

-3-

Exhibit 10.2

respective direct or indirect Subsidiaries is a party with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers’ International Union, its predecessors-in-interest, and their respective constituent local unions.

“Death Benefit Agreements” has the meaning set forth in Section 5.1(b).

“Delayed Transfer Employee” has the meaning set forth in Section 2.4.

“Distribution” has the meaning set forth in the Recitals.

“Employee Matters Agreement” has the meaning set forth in the preamble.

“Employment Agreement” means any individual employment, retention, consulting, change in control, split dollar life insurance, sale bonus, incentive bonus, severance or other individual compensatory agreement between any current or former employee and Timken or any of its Affiliates. For the avoidance of doubt, Excess Benefit Agreements between Timken (or TimkenSteel) and certain employees will not constitute Employment Agreements.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Retirement Plan Transfer Amount” has the meaning set forth in Section 7.1(b).

“Final Retirement Plan Transfer Amount” has the meaning set forth in Section 7.1(c).

“Flex Plan Amount” has the meaning set forth in Section 6.4.

“Former Bearings Business Employee” means any individual who (i) on or before the close of business on the Distribution Date retired or otherwise separated from service from Timken and its Affiliates, and (ii) is not a Former TimkenSteel Business Employee. Notwithstanding the foregoing, the phrase “Distribution Date” in the prior sentence will be deemed to read “Plan Split Date” (i) for the purpose of allocating Liability with respect to the Split DB Plans, Split Retiree Welfare Plans, and Timken VEBA under Section 5.1(a) and (ii) for all purposes under Article VII and Sections 3.3, 6.1(a), 6.2(a), 6.3(a), and 6.7.

“Former TimkenSteel Business Employee” means any individual (i) who on or before the close of business on the Distribution Date retired or otherwise separated from service from Timken and its Affiliates, and (ii) whose last day worked with Timken and its Affiliates prior to the close of business on the Distribution Date was with (A) the Steel Business, (B) the TimkenSteel Former Businesses or (C) any Person that will be a direct or indirect Subsidiary of TimkenSteel immediately after the Distribution. Notwithstanding the foregoing, the phrase “Distribution Date” in the prior sentence will

-4-

Exhibit 10.2

be deemed to read “Plan Split Date” (i) for the purpose of allocating Liability with respect to the Split DB Plans, Split Retiree Welfare Plans, and Timken VEBA under Section 5.1(a) and (ii) for all purposes under Article VII and Sections 6.1(a), 6.2(a), 6.3(a), and 6.7.

“Group” means the Bearings Group or the TimkenSteel Group, as the context requires.

“ILS” has the meaning set forth in Section 3.1(b).

“ILSC” has the meaning set forth in Section 3.1(b).

“Life Insurance Policy” has the meaning set forth in Section 5.1(b).

“Mexico Spinoff Pension Plan” has the meaning set forth in Section 3.3(a).

“Mexico Split Pension Plan” has the meaning set forth in Section 3.3(a).

“Non-U.S. Benefit Plan” means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees outside of the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no Timken Equity Compensation Award, nor any plan under which any such Timken Equity Compensation Award is granted, will constitute a “Non-U.S. Benefit Plan” under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Non-U.S. Benefit Plan for purposes hereof.

“Option Exercise Price” means the pre-adjustment exercise price of the applicable Timken Option.

“Plan Payee” means, as to an individual who participates in a Benefit Plan, such individual’s dependents, beneficiaries, alternate payees and alternate recipients, as applicable under such Benefit Plan.

“Plan Split Date” means May 1, 2014.

“Pre-Distribution Action” means an Action by any Third Party with respect to a Split Plan, Bearings Employee, Former Bearings Business Employee, TimkenSteel Employee, or Former TimkenSteel Business Employee that (i) arises from an act, omission, or event that occurred prior to (A) the Plan Split Date, in the case of any Action arising out of or otherwise related to a Split Retiree Welfare Plan, a Split DB Plan, or the Timken VEBA, or (B) the Distribution, in the case of any other Action, and (ii) is not otherwise designated as TimkenSteel Litigation in the Separation Agreement.

-5-

Exhibit 10.2

“Repayment Agreement” means any The Timken Company Repayment Agreement (with respect to relocation expenses), Educational Reimbursement Program Repayment Agreement, or Educational Assistance Repayment Agreement.

“Represented Former TimkenSteel Employee” means any Former TimkenSteel Business Employee who immediately prior to his or her retirement or separation from service from Timken and its Affiliates was covered by a Collective Bargaining Agreement.

“Represented TimkenSteel Employee” means any TimkenSteel Employee who, as of the close of business on the Plan Split Date, is covered by a Collective Bargaining Agreement.

“Retained Severance Benefits” has the meaning set forth in Section 6.1(b).

“Scheme” has the meaning set forth in Section 3.1.

“SEMPP” has the meaning set forth in Section 5.3(b).

“Separation Agreement” has the meaning set forth in the Recitals.

“Split DB Plans” has the meaning set forth in Section 7.1(a).

“Split DC Plans” has the meaning set forth in Section 8.1(a).

“Split Nonqualified Plans” has the meaning set forth in Section 9.1(a).

“Split Non-U.S. Plan” means a Non-U.S. Benefit Plan sponsored, maintained or contributed to by the Bearings Group that transferred liabilities to a Non-U.S. Benefit Plan sponsored, maintained or contributed to by the TimkenSteel Group in connection with the Distribution.

“Split Plans” means the Split Welfare Plans, Split Retiree Welfare Plans, Split DB Plans, Split DC Plans, Split Nonqualified Plans, and Split Non-U.S. Plans.

“Split Retiree Welfare Plans” has the meaning set forth in Section 6.1(a).

“Split Welfare Plans” has the meaning set forth in Section 6.1(b).

“Steel Section” has the meaning set forth in Section 3.1(a).

“Steel UK” has the meaning set forth in Section 3.1(b).

“Timken” has the meaning set forth in the preamble.

“Timken Compensation Committee” means the Compensation Committee of the Board of Directors of Timken.

-6-

Exhibit 10.2

“Timken Deferred Share” means a deferred share award granted by Timken under a Timken LTIP before the Distribution Date.

“Timken Director Plan” has the meaning set forth in Section 9.6.

“Timken Equity Compensation Award” means each Timken Option, Timken Performance Share, Timken Restricted Share, Timken Deferred Share, Timken Performance-Based RSU or Timken Time-Based RSU.

“Timken Option” means an option to acquire Timken Common Shares granted by Timken under a Timken LTIP before the Distribution Date.

“Timken LTIP” means either of The Timken Company Long-Term Incentive Plan for directors, officers and other key employees (amended and restated as of February 5, 2008) or The Timken Company 2011 Long-Term Incentive Plan for directors, officers and other key employees.

“Timken Performance Share” means a performance share award granted by Timken under a Timken LTIP before the Distribution Date.

“Timken Performance-Based RSU” means a performance-based restricted stock unit award granted by Timken under a Timken LTIP before the Distribution Date.

“Timken PRSU Price” means the average closing price of Timken Common Shares solely on the New York Stock Exchange as reported by Bloomberg L.P. or any successor thereto for the period of the five consecutive Trading Days ending on the Distribution Date (as traded on the “regular way” market).

“Timken Restricted Share” means a restricted Timken Common Share granted by Timken under a Timken LTIP before the Distribution Date.

“Timken Time-Based RSU” means a time-based restricted stock unit award granted by Timken under a Timken LTIP before the Distribution Date.

“Timken VEBA” has the meaning set forth in Section 6.7.

“TimkenSteel” has the meaning set forth in the preamble.

“TimkenSteel Benefit Plan” means (i) the TimkenSteel Spinoff DB Plans, the TimkenSteel Spinoff Retiree Welfare Plans, and the TimkenSteel VEBA, and (ii) any Benefit Plan sponsored or maintained by any member of the TimkenSteel Group. TimkenSteel Benefit Plan will also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the TimkenSteel Group contributes for the benefit of its employees. For the avoidance of doubt, no member of the TimkenSteel Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to Timken any reimbursement in respect of such Benefit Plan.

-7-

Exhibit 10.2

“TimkenSteel Common Shares” means the common stock, without par value, of TimkenSteel.

“TimkenSteel Deferred Share” means a deferred share award relating to TimkenSteel Common Shares granted by TimkenSteel as of the Distribution under a TimkenSteel LTIP pursuant to Section 10.1(a)(ii)(B).

“TimkenSteel Employee” means each individual who, as of the close of business on the Distribution Date, is employed by a member of the TimkenSteel Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). TimkenSteel Employees also include TimkenSteel Transferees, effective as of the Applicable Transfer Date. Notwithstanding the foregoing, the phrase “Distribution Date” in the first sentence of this definition will be deemed to read “Plan Split Date” and TimkenSteel Employee will include any individual whom Timken has, as of the Plan Split Date, designated to become employed by the TimkenSteel Group on or prior to the Distribution Date, in each case, (i) for the purpose of allocating Liability with respect to the Split DB Plans, Split Retiree Welfare Plans, and Timken VEBA under Section 5.1(a) and (ii) for all purposes under Article VII and Sections 3.3, 6.1(a), 6.2(a), 6.3(a), and 6.7.

“TimkenSteel Employment Agreement” has the meaning set forth in Section 5.4.

“TimkenSteel Equity Compensation Award” means each TimkenSteel Option, TimkenSteel Performance Share, TimkenSteel Restricted Share, TimkenSteel Deferred Share, or TimkenSteel Time-Based RSU.

“TimkenSteel Flexible Account Plan” has the meaning set forth in Section 6.4.

“TimkenSteel LTIP” means the TimkenSteel 2014 Equity and Incentive Compensation Plan and any stock-based or other incentive plan identified by TimkenSteel before the Distribution Date.

“TimkenSteel Non-U.S. Benefit Plan” means any Non-U.S. Benefit Plan sponsored or maintained by a member of the TimkenSteel Group.

“TimkenSteel Option” means an option to acquire TimkenSteel Common Shares granted by TimkenSteel as of the Distribution under a TimkenSteel LTIP pursuant to Section 10.1(a)(i)(B).

“TimkenSteel Performance Share” means performance share awards relating to TimkenSteel Common Shares granted by TimkenSteel as of the Distribution under a TimkenSteel LTIP.

“TimkenSteel Price” means the Option Exercise Price multiplied by a fraction, (a) the numerator of which is the average of the high and low sale price of a TimkenSteel Common Share solely on the New York Stock Exchange on the Trading Day

-8-

Exhibit 10.2

immediately following the Distribution Date (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto and (b) the denominator of which is the average of the high and low sale price of a Timken Common Share solely on the New York Stock Exchange on the Distribution Date (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto.

“TimkenSteel Restricted Share” means a restricted TimkenSteel Common Share granted by TimkenSteel as of the Distribution under a TimkenSteel LTIP pursuant to Section 10.1(a)(ii)(A).

“TimkenSteel Retiree Welfare Claims” has the meaning set forth in Section 6.1(a).

“TimkenSteel Spinoff DB Plans” has the meaning set forth in Section 7.1(a).

“TimkenSteel Spinoff DC Plans” has the meaning set forth in Section 8.1(a).

“TimkenSteel Spinoff Nonqualified Plans” has the meaning set forth in Section 9.1(a).

“TimkenSteel Spinoff Retiree Welfare Plans” has the meaning set forth in Section 6.1(a).

“TimkenSteel Spinoff Welfare Plan” has the meaning set forth in Section 6.1(b).

“TimkenSteel Time-Based RSU” means restricted stock unit award with respect to TimkenSteel Common Shares granted by TimkenSteel as described in Section 10.1(a)(ii)(C) that vests based solely on the passage of time.

“TimkenSteel Transferees” means the Delayed Transfer Employees who transfer from the Bearings Group to the TimkenSteel Group.

“TimkenSteel VEBA” has the meaning set forth in Section 6.7.

“TimkenSteel Welfare Claims” has the meaning set forth in Section 6.1(b).

“TimkenSteel Workers’ Compensation Claim” has the meaning set forth in Section 6.5.

“Trading Day” means the period of time during any given calendar day, beginning at 9:30 a.m. (New York time) (or such other time as the New York Stock Exchange publicly announces is the official open of trading), and ending at 4:01 p.m. (New York time) (or one minute after such other time as the New York Stock Exchange publicly announces is the official close of trading), in which trading and settlement in Timken Common Shares or TimkenSteel Common Shares is permitted on the New York Stock Exchange.

-9-

Exhibit 10.2

“True-Up Amount” has the meaning set forth in Section 7.1(c).

“TUK” has the meaning set forth in Section 3.1(b).

“TUK Section” has the meaning set forth in Section 3.1(a).

“Vendor Contract” has the meaning set forth in Section 14.1.

“Welfare Plan” means each Benefit Plan that provides life insurance, health care, dental care, vision care, employee assistance programs (EAP), accidental death and dismemberment insurance, disability, severance, vacation or other group welfare or fringe benefits or is otherwise an “employee welfare benefit plan” as described in Section 3(1) of ERISA.

“Workers’ Compensation Event” means the event, injury, illness or condition giving rise to a workers’ compensation claim.

Section 1.2 Other Capitalized Terms. Capitalized terms not defined in this Employee Matters Agreement, including the following, will have the meanings ascribed to them in the Separation Agreement:


•	Action


•	Affiliate


•	Ancillary Agreements


•	Bearings Entities


•	Bearings Group


•	Damages


•	Distribution Date


•	Distribution Ratio


•	Governmental Authority


•	Law


•	Liability


•	Person


•	Shared Liability


•	Steel Business


•	Subsidiary


•	Tax


•	Third Party


•	Third-Party Claim


•	Timken Common Shares


•	TimkenSteel Entities


•	TimkenSteel Former Businesses


•	TimkenSteel Group


•	TimkenSteel Litigation

-10-

Exhibit 10.2


•	Transition Services Agreement

ARTICLE II
GENERAL PRINCIPLES; EMPLOYEE TRANSFERS

Section 2.1 Bearings Group Employee Liabilities. Except as specifically provided in this Employee Matters Agreement, the Bearings Group will be solely responsible for (i) all employment, compensation and employee benefits Liabilities relating to Bearings Employees and Former Bearings Business Employees, (ii) all Liabilities arising under each Bearings Benefit Plan, and (iii) any other Liabilities expressly assigned or allocated to a Bearings Group member under this Employee Matters Agreement.

Section 2.2 TimkenSteel Group Employee Liabilities. Except as specifically provided in this Employee Matters Agreement, the TimkenSteel Group will be solely responsible for (i) all employment, compensation and employee benefits Liabilities relating to TimkenSteel Employees and Former TimkenSteel Business Employees, (ii) all Liabilities arising under each TimkenSteel Benefit Plan, and (iii) any other Liabilities expressly assigned or allocated to a TimkenSteel Group member under this Employee Matters Agreement. Subject to Section 5.1(b), to the extent any of the Liabilities assigned to TimkenSteel pursuant to this Section 2.2 or Section 6.1 are funded by a life insurance policy held by a member of the Bearings Group on the life of a TimkenSteel Employee or Former TimkenSteel Business Employee, such policy will be assigned to TimkenSteel.

Section 2.3 Bearings Benefit Plans/TimkenSteel Benefit Plans.

(a) Except as otherwise provided herein, effective as of (i) the Plan Split Date, in the case of the Split DB Plans, the Split Retiree Welfare Plans, the Timken VEBA, and the Mexico Split Pension Plan and (ii) the Distribution, in the case of all other Bearings Benefit Plans and Bearings Non-U.S. Benefit Plans, the Bearings Group will be exclusively responsible for administering each Bearings Benefit Plan and Bearings Non-U.S. Benefit Plan in accordance with its terms and for all obligations and liabilities with respect to the Bearings Benefit Plans and Bearings Non-U.S. Benefit Plans and all benefits owed to participants in the Bearings Benefit Plans and Bearings Non-U.S. Benefit Plans, whether arising before, on or after the Distribution Date or Plan Split Date, as applicable.

(b) Except as otherwise provided herein, effective as of (i) the Plan Split Date, in the case of the TimkenSteel Spinoff DB Plans, the TimkenSteel Spinoff Retiree Welfare Plans, the TimkenSteel VEBA, and the Mexico Spinoff Pension Plan and (ii) the Distribution, in the case of all other TimkenSteel Benefit Plans and TimkenSteel Non-U.S. Benefit Plans, the TimkenSteel Group will be exclusively responsible for administering each TimkenSteel Benefit Plan and TimkenSteel Non-U.S. Benefit Plan in accordance with its terms and for all obligations and liabilities with respect to the TimkenSteel Benefit Plans and TimkenSteel Non-U.S. Benefit Plans and

-11-

Exhibit 10.2

all benefits owed to participants in the TimkenSteel Benefit Plans and TimkenSteel Non-U.S. Benefit Plans, whether arising before, on or after the Distribution Date or Plan Split Date, as applicable.

Section 2.4 Employee Transfers. Upon mutual agreement of TimkenSteel and Timken, any employee whose employment transfers within 6 months after the Distribution Date from the Bearings Group to the TimkenSteel Group or from the TimkenSteel Group to the Bearings Group because such employee was inadvertently and erroneously treated as employed by the wrong employer on the Distribution Date and who was continuously employed by a member of the TimkenSteel Group or the Bearings Group (as applicable) from the Distribution Date through the date such employee commences employment with a member of the Bearings Group or TimkenSteel Group (as applicable) will be a “Delayed Transfer Employee”; provided, however, that no employee of either Group who is covered by a Collective Bargaining Agreement at the time such employee transfers to the other Group will be a Delayed Transfer Employee. Notwithstanding anything herein to the contrary, no employee will be considered a Delayed Transfer Employee unless the mutual agreement with respect to, and Applicable Transfer Date of, any Delayed Transfer Employee occurs on or before the date that is 6 months after the Distribution Date.

Section 2.5 Collective Bargaining Agreements.

(a) Effective as of the Distribution Date, Timken or a Bearings Group member will retain or assume each Collective Bargaining Agreement then in effect covering Bearings Employees and TimkenSteel or a TimkenSteel Group member will retain or assume each Collective Bargaining Agreement then in effect covering TimkenSteel Employees.

(b) The parties agree that certain subjects of this Employee Matters Agreement have been, and may in the future be, the subject of effects bargaining with the United Steelworkers Union and that certain provisions shall be deemed modified to the extent necessary to conform with any agreements reached by the parties with the United Steelworkers Union as a result of such effects bargaining.

(c) The terms of this Employee Matters Agreement will be adjusted or conformed, as and where necessary, so as to not breach or otherwise contravene any Collective Bargaining Agreement found to be applicable.

ARTICLE III
NON-U.S. EMPLOYEE TRANSFERS AND BENEFIT PLANS

Section 3.1 UK Pension. Timken and TimkenSteel will use all reasonable endeavors to procure the sectionalization of the Timken UK Pension Scheme (the “Scheme”) with effect from the Distribution Date such that:

-12-

Exhibit 10.2

(a) the Scheme shall be split into the Timken UK Limited section (the “TUK Section”) and the TimkenSteel UK Limited section (the “Steel Section”) to the extent permissible under UK legislation;

(b) Timken UK Limited (“TUK”), Timken ILS Limited (“ILS”) and Timken ILS Cheltenham Limited (“ILSC”) will be the participating employers responsible for the TUK Section and TimkenSteel UK Limited (“Steel UK”) will be the participating employer responsible for the Steel Section;

(c) notwithstanding anything to the contrary in the agreement to be entered into between Timken, TimkenSteel, TUK, Steel UK, ILS, ILSC and the trustees of the Scheme on or about the date of this Employee Matters Agreement setting out the terms for sectionalization of the Scheme, the liabilities relating to members of the Scheme who are Bearings Employees and Former Bearings Business Employees shall be allocated to the TUK Section and the liabilities relating to members of the Scheme who are TimkenSteel Employees and Former TimkenSteel Business Employees shall be allocated to the Steel Section; and

(d) the assets of the Scheme shall be separated and allocated to the TUK Section and the Steel Section in proportion to the liabilities which the TUK Section and the Steel Section bear to the aggregate liabilities of the Scheme.

Section 3.2 IRBP. Timken will retain all obligations and liabilities related to The Timken Company International Retirement Benefit Plan and any corresponding assets related thereto.

Section 3.3 Mexico Pension.

(a) Effective as of the Plan Split Date, a TimkenSteel Entity has established and adopted a defined benefit pension plan (the “Mexico Spinoff Pension Plan”) to provide retirement benefits to certain TimkenSteel Employees in Mexico who participated in the Plan de Jubilacion de los Empleados de Planta de Timken de Mexico (the “Mexico Split Pension Plan”) prior to the Plan Split Date. The Mexico Spinoff Pension Plan assumed liability for all benefits accrued or earned by TimkenSteel Employees and their Plan Payees under the Mexico Split Pension Plan as of the Plan Split Date. As of the Plan Split Date, TimkenSteel or a member of the TimkenSteel Group is solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the Mexico Spinoff Pension Plan so that it complies with applicable local law. As of the Plan Split Date, the liabilities under the Mexico Split Pension Plan relating to TimkenSteel Employees and their Plan Payees have ceased to be liabilities of the Mexico Split Pension Plan, and have been assumed by the Mexico Spinoff Pension Plan, and the Bearings Group and the Mexico Split Pension Plan will retain all liabilities with respect to Former TimkenSteel Business Employees, Bearings Employees, and Former Bearings Business Employees.

-13-

Exhibit 10.2

(b) On the Plan Split Date, Timken or a member of the Bearings Group caused the Mexico Split Pension Plan (or any applicable trust related thereto) to transfer to the Mexico Spinoff Pension Plan (or any applicable trust related thereto) a portion of the assets of the Mexico Split Pension Plan, in cash or in kind, equal to the projected benefit obligation of liabilities being assumed by the Mexico Spinoff Pension Plan pursuant to Section 3.3(a), as determined in the actuarial valuation prepared by Lockton Companies, as of April 30, 2014.

ARTICLE IV
SERVICE CREDIT

Section 4.1 Service Credit for Employee Transfers. Subject to the terms of any applicable Collective Bargaining Agreement, the Benefit Plans will provide the following service crediting rules effective as of the Distribution Date:

(c) From and after (i) the Plan Split Date, in the case of the TimkenSteel Spinoff DB Plans, the TimkenSteel Spinoff Retiree Welfare Plans, and the TimkenSteel VEBA, and (ii) the Distribution Date, in the case of all other TimkenSteel Benefit Plans, TimkenSteel will, and will cause its Affiliates and successors to, provide credit under the TimkenSteel Benefit Plans to each TimkenSteel Employee for service with the Bearings Group prior to the Distribution Date or Plan Split Date, as applicable, for purposes of eligibility, vesting, and benefit service under the appropriate TimkenSteel Benefit Plans in which the TimkenSteel Employee is otherwise eligible, subject to the terms of those plans; provided, however, that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both Bearings Benefit Plans and TimkenSteel Benefit Plans.

(d) A Delayed Transfer Employee’s service with the TimkenSteel Group or the Bearings Group (as applicable) following the Distribution will be recognized for purposes of eligibility, vesting and benefit service under the appropriate Bearings Benefit Plans or TimkenSteel Benefit Plans as appropriate in which they are otherwise eligible, subject to the terms of those plans; provided, however, that this paragraph (b) will not apply to service crediting under the Split DB Plans or TimkenSteel Spinoff DB Plans; and provided, further, that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both Bearings Benefit Plans and TimkenSteel Benefit Plans.

(e) Except as provided in Section 4.1(b), with respect to an employee hired by the TimkenSteel Group or the Bearings Group after the Distribution Date, the Benefit Plans of the TimkenSteel Group for employees hired by the TimkenSteel Group or Bearings Group for employees hired by the Bearings Group will not recognize such employee’s service with the Bearings Group for employees hired by the TimkenSteel Group or TimkenSteel Group for employees hired by the Bearings Group unless required by Law or an applicable collective bargaining agreement.

-14-

Exhibit 10.2

ARTICLE V
LITIGATION AND COMPENSATION

Section 5.1 Employee-Related Litigation.

(c) Notwithstanding any provision of this Employee Matters Agreement to the contrary, Liability with respect to any Pre-Distribution Action: (i) will be a TimkenSteel Liability under the Separation Agreement to the extent it can be readily attributed to TimkenSteel Employees and/or Former TimkenSteel Business Employees; (ii) will be a Bearings Liability under the Separation Agreement to the extent it can be readily attributed to Bearings Employees and/or Former Bearings Business Employees; and (iii) will be a Shared Liability under the Separation Agreement to the extent it cannot be readily attributed to Bearings Employees and Former Bearings Business Employees, or TimkenSteel Employees and Former TimkenSteel Business Employees, as described in clauses (i) and (ii). A Pre-Distribution Action will be subjection to Section 6.8 of the Separation Agreement.

(d) Timken will have sole authority for administering, and making decisions with respect to, the claims being pursued to designate Timken as the beneficiary under the life insurance policies (the “Life Insurance Policies”) on the lives of Bill Bowling and Philip Weigel associated with the death benefit agreements that Timken or one of its current or former Affiliates entered into with Bill Bowling and Philip Weigel (the “Death Benefit Agreements”), and will use its reasonable efforts to obtain such redesignation. Timken will retain responsibility for paying all amounts owed under the Death Benefit Agreement with Philip Weigel. TimkenSteel will reimburse Timken for all amounts Timken pays to the beneficiaries of the Death Benefit Agreement with Philip Weigel to the extent a member of the Bearings Group does not receive reimbursements for such amounts pursuant to a Life Insurance Policy for Philip Weigel. To the extent a member of the Bearings Group is a beneficiary under a Life Insurance Policy for Philip Weigel, Timken will take commercially reasonable actions necessary to obtain the proceeds under the Life Insurance Policy. Timken and TimkenSteel acknowledge that Timken has paid the beneficiaries of the Death Benefit Agreement with Bill Bowling the full amount due under such Death Benefit Agreement, and hereby agree that Timken will retain any reimbursement that it receives for such amounts pursuant to a Life Insurance Policy for Bill Bowling.

Section 5.2 Vacation. Subject to the terms of any applicable Collective Bargaining Agreement and except to the extent not permitted by applicable law, the Bearings Group will assume or retain, as applicable, responsibility for accrued vacation attributable to Bearings Employees as of the Distribution Date, or Applicable Transfer Date. Subject to the terms of any applicable Collective Bargaining Agreement and except to the extent not permitted by applicable law, the TimkenSteel Group will assume or retain, as applicable, responsibility for accrued vacation attributable to TimkenSteel Employees as of the Distribution Date, or Applicable Transfer Date.

-15-

Exhibit 10.2

Section 5.3 Annual Bonuses.

(a) Eligible employees of the Bearings Group and TimkenSteel Group will continue to participate in the Timken Annual Performance Award Pay Plan (“APA”) through the Distribution Date or, for TimkenSteel Transferees, the Applicable Transfer Date. Timken will remain responsible for and will pay any awards earned under the APA to all Bearings Employees and Former Bearings Business Employees, and TimkenSteel will be responsible for and will pay any awards earned under the APA by TimkenSteel Employees and Former TimkenSteel Business Employees. The Bearings Group will be responsible for establishing and paying any annual bonus for its employees for performance periods after the Distribution Date or, for Bearings Transferees, the Applicable Transfer Date, and the TimkenSteel Group will be responsible for establishing and paying any annual bonus for its employees for performance periods after the Distribution Date.

(b) Eligible employees of the Bearings Group and the TimkenSteel Group will continue to participate in the Timken Senior Executive Management Performance Plan (the “SEMPP”) through December 31, 2014. The determination of whether any portion of an award under the SEMPP with respect to the 2014 fiscal year (a “2014 SEMPP Award”) has been earned will be made based upon the achievement of the applicable management objectives measured as of December 31, 2014. Such determination will be made by the Timken Compensation Committee in accordance with the SEMPP. With respect to TimkenSteel Employees, the amount of any 2014 SEMPP Award will be prorated based on the number of days of the 2014 fiscal year completed as of the Distribution Date. Notwithstanding any provision of the SEMPP, Timken will pay each 2014 SEMPP Award held by a Bearings Employee or a Former Bearings Business Employee, and TimkenSteel will pay each 2014 SEMPP Award held by a TimkenSteel Employee or a Former TimkenSteel Business Employee.

Section 5.4 Employment Agreements. Subject to Section 5.1(b), effective as of the Distribution, TimkenSteel or a member of the TimkenSteel Group will assume and be solely responsible for any Employment Agreement to which a TimkenSteel Employee or a Former TimkenSteel Business Employee is a party (a “TimkenSteel Employment Agreement”), including the agreements listed on Schedule 5.4, and the Bearings Group will have no liabilities with respect thereto. Notwithstanding any provision to the contrary, (i) the TimkenSteel Employment Agreements will be the responsibility of one or more members of the TimkenSteel Group following the Distribution Date; and (ii) Timken will retain and be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, any Employment Agreement that is not a TimkenSteel Employment Agreement.

Section 5.5 Repayment Agreements. With respect to each TimkenSteel Employee who has entered into a Repayment Agreement with Timken, Timken will assign all of its rights under such Repayment Agreement to TimkenSteel, and TimkenSteel will assume and be responsible for paying any amounts Timken owes to

-16-

Exhibit 10.2

the TimkenSteel Employee under such Repayment Agreement as of the Distribution Date or Applicable Transfer Date in accordance with the terms of such agreement and any underlying Timken policy in effect as of the Distribution Date. TimkenSteel may retain any amounts it receives if any TimkenSteel Employee becomes obligated to repay reimbursements made under any such Repayment Agreement assumed by TimkenSteel.

ARTICLE VI
CERTAIN WELFARE BENEFIT PLAN MATTERS

Section 6.1 TimkenSteel Spinoff Welfare Plans.

(d) Effective as of the Plan Split Date, TimkenSteel established the TimkenSteel Corporation Welfare Benefit Plan for Retirees and the TimkenSteel Corporation Bargaining Unit Welfare Benefit Plan for Retirees (together, the “TimkenSteel Spinoff Retiree Welfare Plans”). Each TimkenSteel Spinoff Retiree Welfare Plan has terms and features (including benefit coverage options, employer contribution provisions and retiree medical coverage) that are substantially similar to one of the Bearings Benefit Plans listed on Schedule 6.1(a) (such Bearings Benefit Plans, the “Split Retiree Welfare Plans”) such that (for the avoidance of doubt) each Split Retiree Welfare Plan is substantially replicated by a TimkenSteel Spinoff Retiree Welfare Plan, except as otherwise provided on Schedule 6.1(a). As of the Plan Split Date, each TimkenSteel Spinoff Retiree Welfare Plan covers those TimkenSteel Employees and Former TimkenSteel Business Employees and their Plan Payees who immediately prior to the Plan Split Date were participating in, or entitled to present or future benefits under, the corresponding Split Retiree Welfare Plan. The TimkenSteel Group and the TimkenSteel Spinoff Retiree Welfare Plans are solely responsible for all claims incurred by TimkenSteel Employees and Former TimkenSteel Business Employees and their Plan Payees under the TimkenSteel Spinoff Retiree Welfare Plans and Split Retiree Welfare Plans (“TimkenSteel Retiree Welfare Claims”) before, on and after the Plan Split Date, but only to the extent such claims are not payable under an insurance policy held by the Bearings Group. To the extent any TimkenSteel Retiree Welfare Claims are payable under an insurance policy held by the Bearings Group, Timken will take all commercially reasonable actions necessary to process such claim and obtain payment under the applicable insurance policy. Effective as of the Plan Split Date, TimkenSteel Employees and their Plan Payees ceased to be covered by the Split Retiree Welfare Plans. The Bearings Group and the Split Retiree Welfare Plans will remain solely responsible for all claims incurred by Bearings Employees and Former Bearings Business Employees and their Plan Payees, whether incurred before, on, or after the Plan Split Date.

(e) Effective not later than the Distribution, TimkenSteel or a member of the TimkenSteel Group will establish certain other welfare benefit plans (such plans, the “TimkenSteel Spinoff Welfare Plans”). TimkenSteel will cause each TimkenSteel Spinoff Welfare Plan to have terms and features (including benefit coverage options, employer

-17-

Exhibit 10.2

contribution provisions and retiree medical coverage) that are substantially similar to one of the Bearings Benefit Plans listed on Schedule 6.1(b) (such Bearings Benefit Plans, the “Split Welfare Plans”) such that (for the avoidance of doubt) each Split Welfare Plan is substantially replicated by a TimkenSteel Spinoff Welfare Plan, except as otherwise provided on Schedule 6.1(b). From and after the Distribution Date or Applicable Transfer Date, TimkenSteel will cause each TimkenSteel Spinoff Welfare Plan to cover those TimkenSteel Employees and Former TimkenSteel Business Employees and their Plan Payees who immediately prior to the Distribution or Applicable Transfer Date were participating in, or entitled to present or future benefits under, the corresponding Split Welfare Plan, except as otherwise provided in the Transition Services Agreement. With respect to any severance benefits owed to any Bearings Employee, Former Bearings Business Employee, TimkenSteel Employee, or Former TimkenSteel Business Employee as a result of a termination of employment occurring on or prior to the Distribution Date (the “Retained Severance Benefits”), the Bearings Group and the applicable Bearings Welfare Plans (including the Split Welfare Plans) will be solely responsible for all such Retained Severance Benefits. The TimkenSteel Group and the TimkenSteel Spinoff Welfare Plans will be solely responsible for all claims incurred by TimkenSteel Employees and Former TimkenSteel Business Employees and their Plan Payees under the TimkenSteel Spinoff Welfare Plans and Split Welfare Plans (except with respect to Retained Severance Benefits or as otherwise provided in the Transition Services Agreement) (“TimkenSteel Welfare Claims”) before, on and after the Distribution Date or Applicable Transfer Date, but only to the extent such claims are not otherwise payable under an insurance policy held by the Bearings Group. To the extent any TimkenSteel Welfare Claims are payable under an insurance policy held by the Bearings Group, Timken will take all commercially reasonable actions necessary to process such claim and obtain payment under the applicable insurance policy. Effective as of the Distribution Date or Applicable Transfer Date, Timken will cause TimkenSteel Employees and their Plan Payees to cease to be covered by the Bearings Welfare Plans (including the Split Welfare Plans), except as otherwise provided in the Transition Services Agreement. The Bearings Group and the Bearings Welfare Plans will remain solely responsible for all claims incurred by Bearings Employees and Former Bearings Business Employees and their Plan Payees, whether incurred before, on, or after the Distribution Date.

(f) For purposes of this Section 6.1, a claim will be deemed “incurred” on the date that the event that gives rise to the claim occurs (for purposes of life insurance, severance, sickness, accident and disability programs) or on the date that treatment or services are provided (for purposes of health care programs).

Section 6.2 Continuation of Elections.

(c) As of the Plan Split Date, TimkenSteel has caused the TimkenSteel Spinoff Retiree Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child

-18-

Exhibit 10.2

support orders and other orders issued by courts of competent jurisdiction) in effect with respect to Former TimkenSteel Business Employees prior to the Plan Split Date under the corresponding Split Retiree Welfare Plan, to the extent such elections and designations and orders are applicable to such Split Retiree Welfare Plan, and will continue to apply and maintain in force comparable elections and designations and orders under the TimkenSteel Spinoff Retiree Welfare Plans for the remainder of the period or periods for which such elections or designations are by their terms effective.

(d) As of the Distribution Date, or Applicable Transfer Date, TimkenSteel will cause the TimkenSteel Spinoff Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child support orders and other orders issued by courts of competent jurisdiction) in effect with respect to TimkenSteel Employees and Former TimkenSteel Business Employees prior to the Distribution Date, or Applicable Transfer Date, under the corresponding Split Welfare Plan, to the extent such elections and designations and orders are applicable to such Split Welfare Plan, and apply and maintain in force comparable elections and designations and orders under the TimkenSteel Spinoff Welfare Plans for the remainder of the period or periods for which such elections or designations are by their original terms effective.

Section 6.3 Deductibles and Other Cost-Sharing Provisions.

(a) As of the Plan Split Date, TimkenSteel has caused the TimkenSteel Spinoff Retiree Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to TimkenSteel Employees and Former TimkenSteel Business Employees under the corresponding Split Retiree Welfare Plan during the plan year in which the Plan Split Date occurs, and the TimkenSteel Spinoff Retiree Welfare Plans have not imposed any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding Split Retiree Welfare Plan prior to the Plan Split Date.

(b) As of the Distribution Date, or Applicable Transfer Date, TimkenSteel will cause the TimkenSteel Spinoff Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to TimkenSteel Employees and Former TimkenSteel Business Employees under the corresponding Split Welfare Plan during the plan year in which the Distribution or Applicable Transfer Date occurs, and the TimkenSteel Spinoff Welfare Plans will not impose any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding Split Welfare Plan prior to the Distribution Date or Applicable Transfer Date.

Section 6.4 Flexible Spending Account Treatment. Notwithstanding Sections 6.2 and 6.3 to the contrary, with respect to the portion of a Split Welfare Plan that consists of medical and dependent care flexible spending accounts (the “Bearings Flexible Account Plan”), as of the Distribution or Applicable Transfer Date, TimkenSteel

-19-

Exhibit 10.2

will be solely responsible for all liabilities with respect to TimkenSteel Employees and Former TimkenSteel Business Employees, and the applicable TimkenSteel Spinoff Welfare Plan (the “TimkenSteel Flexible Account Plan”) will, as required under Section 6.2, give effect to the elections of TimkenSteel Employees and Former TimkenSteel Business Employees that were in effect under the corresponding Split Welfare Plan as of the Distribution Date or Applicable Transfer Date. As soon as practicable following the Distribution or Applicable Transfer Date, Timken will transfer to TimkenSteel in cash an amount equal to the total amount that TimkenSteel Employees and Former TimkenSteel Business Employees have contributed to the Bearings Flexible Account Plan through the Distribution Date or Applicable Transfer Date for the calendar year that includes the Distribution or Applicable Transfer Date less all amounts that have been paid from Bearings Flexible Account Plan through the Distribution Date or Applicable Transfer Date for medical and dependent care claims incurred by the TimkenSteel Employees and Former TimkenSteel Business Employees in the calendar year that includes the Distribution or Applicable Transfer Date (such difference, the “Flex Plan Amount”). If the Flex Plan Amount is less than $0, as soon as practicable after the Distribution or Applicable Transfer Date, TimkenSteel will transfer to Timken in cash an amount equal to all amounts that have been paid from Bearings Flexible Account Plan through the Distribution Date for medical expense and dependent care claims incurred by the TimkenSteel Employees and Former TimkenSteel Business Employees in the calendar year that includes the Distribution or Applicable Transfer Date less the total amount that TimkenSteel Employees and Former Timken Steel Business Employees have contributed to Bearings Flexible Account Plan through the Distribution Date or Applicable Transfer Date for the calendar year that includes the Distribution or Applicable Transfer Date. After the Distribution Date or Applicable Transfer Date, the TimkenSteel Flexible Account Plan will be responsible for reimbursement of all previously unreimbursable medical expense and dependent care claims incurred by TimkenSteel Employees and Former TimkenSteel Business Employees, regardless of when the claims were incurred.

Section 6.5 Workers’ Compensation. The Bearings Group will be solely responsible for all United States (including its territories) workers’ compensation claims of Bearings Employees and Former Bearings Business Employees, regardless of when the Workers’ Compensation Events to which such claims relate occur. The Bearings Group will have sole authority for administering, making decisions with respect to, and paying all United States (including its territories) workers’ compensation claims of TimkenSteel Employees and Former TimkenSteel Business Employees with respect to Workers’ Compensation Events occurring before the Distribution Date or Applicable Transfer Date (“TimkenSteel Workers’ Compensation Claims”), subject to the prior consent of TimkenSteel, which consent shall not be unreasonably withheld. The consent described in the immediately preceding sentence will be evidenced in writing with respect to any decision relating to (a) the settlement of a TimkenSteel Workers’ Compensation Claim, (b) the designation of an “allowed condition,” or (c) the administration of ongoing litigation. TimkenSteel will, and will cause any other TimkenSteel Entity (and each of their respective successors and assigns) to, jointly and

-20-

Exhibit 10.2

severally indemnify, defend and hold harmless Timken and each member of the Bearings Group and each of their respective successors and assigns from and against any and all Damages incurred by Timken arising out of or in connection with a TimkenSteel Workers’ Compensation Claim, whether such Damages arise or accrue prior to, on or following the Distribution Date, but only to the extent such Damages are not payable under an insurance policy held by the Bearings Group. To the extent any such Damages are payable under an insurance policy held by the Bearings Group, Timken will take all commercially reasonable actions necessary to obtain payment of such Damages under the applicable insurance policy. The TimkenSteel Group will be solely responsible for all workers’ compensation claims of TimkenSteel Employees with respect to Workers’ Compensation Events occurring on or after the Distribution Date.

Section 6.6 COBRA. Effective as of the Distribution Date or Applicable Transfer Date, TimkenSteel or a member of the TimkenSteel Group will assume or will cause the TimkenSteel Spinoff Welfare Plans to assume sole responsibility for compliance with COBRA after the Distribution Date or Applicable Transfer Date for all TimkenSteel Employees, Former TimkenSteel Business Employees and their “qualified beneficiaries” for whom a “qualifying event” occurs before, on or after the Distribution Date or the Applicable Transfer Date; provided, however, that Timken or a member of the Bearings Group will be responsible for furnishing any election notice required under COBRA to any TimkenSteel Transferee. Timken, the Bearings Group, or a Split Welfare Plan will remain solely responsible for compliance with COBRA before, on and after the Distribution Date or Applicable Transfer Date for Bearings Employees, Former Bearings Business Employees and their “qualified beneficiaries”; provided, however, that TimkenSteel or a member of the TimkenSteel Group will be responsible for furnishing any election notice required under COBRA to any Bearings Transferee. The terms “qualified beneficiaries” and “qualifying event” will have the meanings given to them under Code Section 4980B and ERISA Sections 601-608. For the avoidance of doubt, Section 6.1(b) will govern whether the TimkenSteel Spinoff Welfare Plans or Split Welfare Plans are responsible for claims incurred by TimkenSteel Employees, Former TimkenSteel Business Employees, or their qualified beneficiaries, while receiving continuation coverage under COBRA.

Section 6.7 Timken VEBA. As of the Plan Split Date, TimkenSteel has established the Voluntary Employees’ Beneficiary Association sponsored by TimkenSteel or its Affiliates as a tax exempt trust under Section 501(c)(9) of the Code (the “TimkenSteel VEBA”). Timken will or will cause the trustee of The Timken Company Voluntary Employees’ Beneficiary Association Trust (the ”Timken VEBA”) to segregate, and then transfer to the trustee of the TimkenSteel VEBA, a portion of the assets held by the Timken VEBA equal to: the fair market value, as of the Plan Split Date, of the assets of the Timken VEBA multiplied by a fraction, the numerator of which is the accumulated post-retirement health benefit obligation determined under ASC 715-60 for Represented TimkenSteel Employees and Represented Former TimkenSteel Employees whose right to post-retirement health benefits is subject to or otherwise based in whole or in part on 1 or more Collective Bargaining Agreements, and the

-21-

Exhibit 10.2

denominator of which is the accumulated post-retirement health benefit obligation determined under ASC 715-60 for all participants and dependents whose right to post-retirement health benefits is subject to or otherwise based in whole or in part on 1 or more Collective Bargaining Agreements. For this purpose, the ASC 715-60 accumulated post-retirement health benefit obligation will be measured at the Plan Split Date using the discount rate in effect at the Plan Split Date, and those other actuarial assumptions then being used by Towers Watson to satisfy Timken’s ASC 715-60 reporting obligation. The segregation described in this Section 6.7 shall occur no later than 30 days after the Plan Split Date. The transfer described in this Section 6.7 shall occur within 180 days after the Distribution Date (unless the parties otherwise agree to postpone such transfer date) and shall be made in cash or, to the extent agreed by the parties, marketable securities.

ARTICLE VII
TAX-QUALIFIED DEFINED BENEFIT PLANS

Section 7.1 TimkenSteel Spinoff DB Plans.

(e) Effective as of the Plan Split Date, TimkenSteel has established and adopted certain defined benefit plans that are intended to qualify under Code Section 401(a), along with a related master trust or trusts that is exempt under Code Section 501(a) (such plans and trusts, the “TimkenSteel Spinoff DB Plans”). On the Plan Split Date, each TimkenSteel Spinoff DB Plan has terms and features (including benefit accrual provisions) that are substantially similar to one of the Benefit Plans listed on Schedule 7.1(a) (such Benefit Plans, the “Split DB Plans”), such that (for the avoidance of doubt) each Split DB Plan is substantially replicated by a corresponding TimkenSteel Spinoff DB Plan. Each TimkenSteel Spinoff DB Plan assumed liability for all benefits accrued or earned (whether or not vested) by TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees under the corresponding Split DB Plan as of the Plan Split Date. As of the Plan Split Date, TimkenSteel or a member of the TimkenSteel Group is solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the TimkenSteel Spinoff DB Plans to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the TimkenSteel Spinoff DB Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. The portion of liabilities relating to TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees have ceased to be liabilities of the applicable Split DB Plan, and have been assumed by the corresponding TimkenSteel Spinoff DB Plan in accordance with this Section and Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA.

(f) Timken or a member of the Bearings Group has caused its actuary to determine the estimated value, as of the Plan Split Date, of the assets required to be held on behalf of each TimkenSteel Spinoff DB Plan in accordance with the

-22-

Exhibit 10.2

assumptions and methodologies set forth in Treasury Regulation Section 1.414(l)-1 and ERISA Section 4044 (the “Estimated Retirement Plan Transfer Amount” for each such plan). Within 60 days after the Plan Split Date, Timken or a member of the Bearings Group caused the trust for each Split DB Plan to transfer to the trust of each TimkenSteel Spinoff DB Plan an amount in cash or in-kind equal to approximately 95% of the Estimated Retirement Plan Transfer Amount for such plan.

(g) Within 3 months after the Plan Split Date, Timken or another member of the Bearings Group will cause its actuary to provide TimkenSteel with a revised calculation of the value, as of the Plan Split Date, of the assets to be transferred to each TimkenSteel Spinoff DB Plan determined in accordance with the assumptions and methodologies set forth in Treasury Regulation Section 1.414(l)-1 and ERISA Section 4044 and reflecting any demographic updates (the “Final Retirement Plan Transfer Amount” for each such TimkenSteel Spinoff DB Plan). Within 120 days after the Plan Split Date, Timken will cause each Split DB Plan to transfer to the corresponding TimkenSteel Spinoff DB Plan an amount in cash or in kind equal to (i) the Final Retirement Plan Transfer Amount, minus (ii) any amounts previously transferred from such Split DB Plan (A) directly to the corresponding TimkenSteel Spinoff DB Plan or (B) to a Third Party on behalf of the corresponding TimkenSteel Spinoff DB Plan (such amount, the “True-Up Amount”). If the True-Up Amount is a negative number with respect to any TimkenSteel Spinoff DB Plan, TimkenSteel will cause each such TimkenSteel Spinoff DB Plan to transfer to the corresponding Split DB Plan an amount, in cash or in kind, by which the amounts described in clause (ii) in the preceding sentence exceed the Final Retirement Plan Transfer Amount. The parties hereto acknowledge that the Split DB Plans’ transfer of the True-Up Amount to the corresponding TimkenSteel Spinoff DB Plans will be in full settlement and satisfaction of the obligations of Timken and the Split DB Plans to transfer assets to the TimkenSteel Spinoff DB Plans pursuant to this Section. Any amounts transferred between a Split DB Plan and a TimkenSteel Spinoff DB Plan pursuant to Section 7.1(b) or 7.1(c), or otherwise to effectuate this Article VII, will be adjusted for earnings in a manner to be determined by mutual agreement of Timken and TimkenSteel.

(h) From and after the Plan Split Date, TimkenSteel and the members of the TimkenSteel Group are solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the TimkenSteel Spinoff DB Plans, whether accrued before, on or after the Plan Split Date. For the avoidance of doubt, the TimkenSteel Spinoff DB Plans will have the sole and exclusive obligation to the extent required by Law and the terms of the applicable TimkenSteel Spinoff DB Plan to restore the unvested accrued benefits attributable to any Former TimkenSteel Business Employee who becomes employed by a member of the TimkenSteel Group and whose employment with Timken or any of its Affiliates terminated on or before the Plan Split Date at a time when such individual’s benefits under the Split DB Plan were not fully vested. Furthermore, the TimkenSteel Spinoff DB Plans will have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the Steel Business to the extent required by applicable Law.

-23-

Exhibit 10.2

Section 7.2 Continuation of Elections. As of the Plan Split Date, TimkenSteel (acting directly or through a member of the TimkenSteel Group) will cause the TimkenSteel Spinoff DB Plans to recognize and maintain all existing elections, including beneficiary designations, payment form elections and rights of alternate payees under qualified domestic relations orders with respect to TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees under the corresponding Split DB Plan.

Section 7.3 Delayed Transfer Employees. Notwithstanding any provision of this Employee Matters Agreement to the contrary, for purposes of this Article VII, the term “Bearings Employees” will not include Bearings Transferees, and the term “TimkenSteel Employees” will not include TimkenSteel Transferees. Timken and TimkenSteel will cooperate in good faith to address any loss a Delayed Transfer Employee experiences under a Split DB Plan or TimkenSteel Spinoff DB Plan by reason of such employee’s transfer described in Section 2.4.

ARTICLE VIII
U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS

Section 8.1 TimkenSteel Spinoff DC Plans.

(c) Effective as of the Distribution Date, TimkenSteel or another member of the TimkenSteel Group will adopt and establish certain defined contribution plans that are intended to qualify under Code Section 401(a), and a related master trust or trusts exempt under Code Section 501(a) (such plans and trusts, the “TimkenSteel Spinoff DC Plans”). Each TimkenSteel Spinoff DC Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Benefit Plans listed on Schedule 8.1(a) (such Benefit Plans, the “Split DC Plans”) such that (for the avoidance of doubt) each Split DC Plan is substantially replicated by a corresponding TimkenSteel Spinoff DC Plan. TimkenSteel or a member of the TimkenSteel Group will be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the TimkenSteel Spinoff DC Plans to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the TimkenSteel Spinoff DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. Each TimkenSteel Spinoff DC Plan will assume liability for all benefits accrued or earned (whether or not vested) by TimkenSteel Employees and Former TimkenSteel Business Employees under the corresponding Split DC Plan as of the Distribution Date or Applicable Transfer Date.

(d) On or as soon as reasonably practicable following the Distribution Date or Applicable Transfer Date (but not later than 30 days thereafter), Timken or another member of the Bearings Group will cause each Split DC Plan to transfer to the applicable TimkenSteel Spinoff DC Plan, and TimkenSteel or another member of the TimkenSteel Group will cause such TimkenSteel Spinoff DC Plan to accept the transfer of, the accounts, liabilities and related assets in such Split DC Plan attributable to

-24-

Exhibit 10.2

TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees. The transfer of assets will be in cash or in kind (as determined by the transferor) and include outstanding loan balances and amounts forfeited by Former TimkenSteel Business Employees that have not yet been reallocated or applied to the payment of contributions or expenses and be conducted in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA.

(e) On or as soon as reasonably practicable following the Applicable Transfer Date (but not later than 30 days thereafter), TimkenSteel or a member of the TimkenSteel Group will cause the accounts, related liabilities, and related assets in the corresponding TimkenSteel Spinoff DC Plan(s) attributable to any Bearings Transferees and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in-kind (as determined by the transferor) in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA to the applicable Split DC Plan(s). Timken or another member of the Bearings Group will cause the applicable Split DC Plan(s) to accept such transfer of accounts, liabilities and assets.

(f) From and after the Distribution Date, except as specifically provided in paragraph (c) above, TimkenSteel and the TimkenSteel Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the TimkenSteel Spinoff DC Plans, whether accrued before, on or after the Distribution Date. For the avoidance of doubt, the TimkenSteel Spinoff DC Plans will, to the extent required by Law and the terms of the applicable TimkenSteel Spinoff DC Plans, have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the TimkenSteel Group and whose employment with Timken or any of its Affiliates, or a member of the Bearings Group, terminated on or before the Distribution at a time when such individual’s benefits under the Split DC Plans were not fully vested. Furthermore, the TimkenSteel Spinoff DC Plans will have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the Steel Business to the extent required by applicable Law.

Section 8.2 Continuation of Elections. As of the Distribution Date, or Applicable Transfer Date, TimkenSteel (acting directly or through a member of the TimkenSteel Group) will cause the TimkenSteel Spinoff DC Plans to recognize and maintain all elections, including investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees under the corresponding Split DC Plan.

Section 8.3 Assumed DC Plans.

(a) Effective as the Distribution Date, TimkenSteel or a member of the TimkenSteel Group will assume and be solely responsible for the defined contribution plans listed on Schedule 8.3 (the “Assumed DC Plans”) and the Bearings Group will

-25-

Exhibit 10.2

have no liabilities with respect thereto. From and after the Distribution Date, TimkenSteel or a member of the TimkenSteel Group will be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the Assumed DC Plans to the Internal Revenue Service for a determination of tax-qualified status) to maintain and administer the Assumed DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. From and after the Distribution Date, TimkenSteel and the TimkenSteel Group will assume and be solely and exclusively responsible for all assets, obligations, and liabilities associated with, or in any way related to, the Assumed DC Plans, whether accrued before, on or after the Distribution Date.

(b) As of the Distribution Date, TimkenSteel (acting directly or through a member of the TimkenSteel Group) will cause the Assumed DC Plans to recognize and maintain all elections, including investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders that were in effect with respect to TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees under the Assumed DC Plans immediately prior to the Distribution Date.

Section 8.4 Contributions Due.

(a) All amounts payable to the Split DC Plans and Assumed DC Plans with respect to employee deferrals, matching contributions and employer contributions for TimkenSteel Employees relating to a time period ending on or prior to the Distribution Date, determined in accordance with the terms and provisions of the Split DC Plans, the Assumed DC Plans, ERISA and the Code, will be paid by Timken or another member of the Bearings Group to the appropriate Split DC Plan or Assumed DC Plan prior to the date of any asset transfer described in Section 8.1(b) or Section 8.3(a).

ARTICLE IX
NONQUALIFIED RETIREMENT PLANS

Section 9.1 TimkenSteel Spinoff Nonqualified Plans.

(a) Effective as of the Distribution, TimkenSteel or another member of the TimkenSteel Group will establish certain nonqualified retirement plans (such plans, the “TimkenSteel Spinoff Nonqualified Plans”). Each TimkenSteel Spinoff Nonqualified Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Bearings Benefit Plans listed on Schedule 9.1(a) (such plans, the “Split Nonqualified Plans”) such that (for the avoidance of doubt), each Split Nonqualified Plan is substantially replicated by a corresponding TimkenSteel Spinoff Nonqualified Plan. TimkenSteel or a member of the TimkenSteel Group will be solely responsible for taking all necessary, reasonable, and appropriate actions to establish, maintain and administer the TimkenSteel Spinoff Nonqualified Plans so that they do not result in adverse Tax consequences under Code Section 409A. Each TimkenSteel

-26-

Exhibit 10.2

Spinoff Nonqualified Plan will assume liability for all benefits accrued or earned (whether or not vested) by TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees under the corresponding Split Nonqualified Plan as of the Distribution Date. From and after the Distribution Date, TimkenSteel and the TimkenSteel Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the TimkenSteel Spinoff Nonqualified Plans, whether accrued before, on or after the Distribution Date, except that Timken will be responsible for distributing any Timken Common Shares that are to be distributed pursuant to any Spinoff Nonqualified Plan. Furthermore, TimkenSteel and the TimkenSteel Group will have the sole obligation to restore in the TimkenSteel Spinoff Nonqualified Plans benefits under the Split Nonqualified Plans attributable to any lost participants who were formerly employed in the Steel Business.

(b) From and after the Distribution Date, Timken and the Bearings Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the nonqualified retirement plans sponsored or maintained by a member of the Bearings Group (including, but not limited to, the Split Nonqualified Plans) to the extent such obligations and liabilities are not specifically assumed by a TimkenSteel Group member or the TimkenSteel Spinoff Nonqualified Plans pursuant to Section 9.1(a) or Section 9.1(c), except that TimkenSteel will be responsible for distributing any TimkenSteel Common Shares that are to be distributed pursuant to any Split Nonqualified Plan.

(c) Effective as of the Distribution, the TimkenSteel Group will assume and be solely responsible for all obligations and liabilities with respect to the Excess Benefits Agreements listed on Schedule 9.1(c) between Timken and certain employees, and the Bearings Group will have no liability with respect thereto. Notwithstanding any provision to the contrary, Timken will retain and be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, any Excess Benefits Agreements between Timken or its Affiliates and certain service providers and former service providers not specifically assumed by TimkenSteel pursuant to this Section 9.1(c).

Section 9.2 No Distributions on Separation. Timken and TimkenSteel acknowledge that neither the Distribution nor any of the other transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Ancillary Agreements will trigger a payment or distribution of compensation under any Benefit Plan that is a nonqualified retirement plan for any Bearings Employee, TimkenSteel Employee, former Bearings Employee or Former TimkenSteel Business Employee and, consequently, that the payment or distribution of any compensation to which any Bearings Employee, TimkenSteel Employee, former Bearings Employee or Former TimkenSteel Business Employee is entitled under any such Benefit Plan will occur upon such individual’s separation from service from the Bearings Group or the TimkenSteel Group, as applicable, or at such other time as specified in the applicable Benefit Plan.

-27-

Exhibit 10.2

Section 9.3 Section 409A. Timken and TimkenSteel will cooperate in good faith so that the Distribution will not result in adverse Tax consequences under Code Section 409A to any current or former employee of any member of the Bearings Group or any member of the TimkenSteel Group, or their respective Plan Payees, in respect of his or her benefits under any Bearings Benefit Plan or TimkenSteel Benefit Plan.

Section 9.4 Continuation of Elections. As of the Distribution Date, or Applicable Transfer Date and as permitted by Code Section 409A, TimkenSteel (acting directly or through a member of the TimkenSteel Group) will cause each TimkenSteel Spinoff Nonqualified Plan to recognize and maintain all elections, including deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to TimkenSteel Employees and their Plan Payees under the corresponding Split Nonqualified Plan.

Section 9.5 Delayed Transfer Employees. Any TimkenSteel Transferee will be treated in the same manner as a TimkenSteel Employee under this Article IX, except that such TimkenSteel Transferee may experience a separation from service (within the meaning of Code Section 409A) on his or her Applicable Transfer Date. Such a TimkenSteel Transferee’s Applicable Transfer Date will be treated as the Distribution Date. In addition, the Bearings Group will assume and be solely responsible, pursuant to the terms of the applicable Split Nonqualified Plan, for any benefits accrued by any Bearings Transferee under any TimkenSteel Spinoff Nonqualified Plan, and the TimkenSteel Group will have no liability with respect thereto. Notwithstanding any provision of this Employee Matters Agreement to the contrary, for purposes of this Article IX, the term “Bearings Employees” will not include Bearings Transferees and the term “TimkenSteel Employees” will not include TimkenSteel Transferees, in each case, with respect to TimkenSteel Spinoff Nonqualified Plans and Split Nonqualified Plans that are defined benefit plans.

Section 9.6 Timken Director Plan.

(a) Timken has adopted The Timken Company Director Deferred Compensation Plan (the “Timken Director Plan”). From and after the Distribution Date, Timken and the Bearings Group will be solely and exclusively responsible for liability accrued prior to the Distribution Date for all deferred amounts under the Timken Director Plan.

ARTICLE X
TIMKEN EQUITY COMPENSATION AWARDS

Section 10.1 Outstanding Timken Equity Compensation Awards.

(c) Each Timken Equity Compensation Award that is outstanding as of the Distribution will be adjusted as described below, so that each holder of a Timken Equity Compensation Award will hold adjusted equity awards comprised of a TimkenSteel Equity Compensation Award and a Bearings Equity Compensation Award

-28-

Exhibit 10.2

unless otherwise provided in this Section 10.1(a); provided, however, that, effective immediately prior to the Distribution, the Timken Compensation Committee may provide for different adjustments with respect to some or all of a holder’s Timken Equity Compensation Awards. For greater certainty, any adjustments made by the Timken Compensation Committee will be deemed incorporated by reference herein as if fully set forth below and will be binding on the parties hereto and their respective Subsidiaries.

(i) Each Timken Option generally will be adjusted in the manner described below, effective as of the Distribution Date and immediately prior to the Distribution, so that immediately following the Distribution each Timken Option holder will hold Bearings Options and TimkenSteel Options in lieu of the Timken Options previously held. The following procedure will generally be applied to each Timken Option with the same grant date and exercise price held by each Timken Option holder as of the Distribution Date:

(A) The Bearings Option will have an exercise price equal to the applicable Bearings Price. The number of Bearings Options will equal the number of Timken Options to which they relate. Such Bearings Options will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Options to which they relate.

(B) The TimkenSteel Option will have an exercise price equal to the applicable TimkenSteel Price. The number of TimkenSteel Options will equal the number of Timken Options multiplied by the Distribution Ratio, rounded down to the nearest whole option. Such TimkenSteel Options will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Options to which they relate.

(ii) With respect to Timken Restricted Shares, Timken Deferred Shares, and Timken Performance-Based RSUs and Timken Time-Based RSUs:

(A) Each holder of Timken Restricted Shares will generally receive from TimkenSteel, as of the time of the Distribution Date and immediately prior to the Distribution, TimkenSteel Restricted Shares determined in the same manner as for other shareholders of Timken Common Shares based on the Distribution Ratio, with the value of any fractional share paid to the holder in cash, less any applicable taxes, as soon as practicable following the Distribution Date (with such cash payment to be made by TimkenSteel to TimkenSteel Employees and Former TimkenSteel Business Employees on the Distribution Date and by Timken to all other holders), except to the extent that such cash payment would result in adverse Tax consequences to the holder

-29-

Exhibit 10.2

under Code Section 409A. Such TimkenSteel Restricted Shares will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Restricted Shares to which they relate (including the right to receive dividends or other distributions paid on TimkenSteel Common Shares). Each Timken Restricted Share will continue to be one Bearings Restricted Share which will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Restricted Shares to which it relates.

(B) Each holder of Timken Deferred Shares will generally receive from TimkenSteel, as of the time of the Distribution Date and immediately prior to the Distribution, an award for TimkenSteel Deferred Shares, determined in the same manner as for shareholders of Timken Common Shares based on the Distribution Ratio, with the value of any fractional share paid to the holder in cash, less any applicable taxes, as soon as practicable following the Distribution Date (with such cash payment to be made by TimkenSteel to TimkenSteel Employees and Former TimkenSteel Business Employees on the Distribution Date and by Timken to all other holders), except to the extent that such cash payment would result in adverse Tax consequences to the holder under Code Section 409A. All TimkenSteel Deferred Shares will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Deferred Shares to which they relate (including the right to be credited with dividends or other distributions paid on TimkenSteel Common Shares). Each Timken Deferred Share will continue to be a Bearings Deferred Share which will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Deferred Share to which it relates.

(C) Each holder of Timken Time-Based RSUs will generally receive from TimkenSteel, as of the time of the Distribution Date and immediately prior to the Distribution, TimkenSteel Time-Based RSUs, determined in the same manner as for shareholders of Timken Common Shares based on the Distribution Ratio, with the value of any fractional share paid to the holder in cash, less any applicable taxes, as soon as practicable following the Distribution Date (with such cash payment to be made by TimkenSteel to TimkenSteel Employees and Former TimkenSteel Business Employees on the Distribution Date and by Timken to all other holders), except to the extent that such cash payment will result in adverse Tax consequences to the holder under Code Section 409A. All TimkenSteel Time-Based RSUs will

-30-

Exhibit 10.2

be subject to the same vesting requirements and dates and other terms and conditions as the Timken Time-Based RSUs to which they relate. Each Timken Time-Based RSU will continue to be a Bearings Time-Based RSU which will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Time-Based RSU to which it relates.

(D) The determination of whether any portion of a 2012 Performance-Based RSU award has been earned will be made based upon the achievement of the applicable management objectives measured as of the Distribution Date. Such determination will be made by the Timken Compensation Committee in accordance with the applicable Timken LTIP. Notwithstanding any provision of the applicable award agreement, Timken will pay each such award held by a Bearings Employee or a Former Bearings Business Employee, and TimkenSteel will pay each such award held by a TimkenSteel Employee or a Former TimkenSteel Business Employee, in cash between January 1, 2015 and March 15, 2015 based on the Timken PRSU Price for each Timken Common Share earned with respect to such 2012 Performance-Based RSU.

(E) The determination of whether any portion of a 2013 Performance-Based RSU award has been earned will be made based upon the achievement of the applicable management objectives measured as of the Distribution Date, and prorated based on the percentage of the applicable performance period completed as of the Distribution Date. Such determination will be made by the Timken Compensation Committee in accordance with the applicable Timken LTIP. Notwithstanding any provision of the applicable award agreement, Timken will pay each such award held by a Bearings Employee or a Former Bearings Business Employee, and TimkenSteel will pay each such award held by a TimkenSteel Employee or a Former TimkenSteel Business Employee, in cash between January 1, 2016 and March 15, 2016 based on the Timken PRSU Price for each Timken Common Share earned with respect to such 2013 Performance-Based RSU. Timken and TimkenSteel will grant new performance-based restricted stock unit awards to their respective employees for the period from the Distribution Date through December 31, 2015.

(iii) Each holder of Timken Performance Shares will generally receive from TimkenSteel, as of the time of the Distribution Date and immediately prior to the Distribution, TimkenSteel Performance Shares determined in the same manner as for other shareholders of Timken Common Shares based on the

-31-

Exhibit 10.2

Distribution Ratio, with the value of any fractional share paid to the holder in cash, less any applicable taxes, as soon as practicable following the Distribution Date (with such cash payment to be made by TimkenSteel to TimkenSteel Employees and Former TimkenSteel Business Employees on the Distribution Date and by Timken to all other holders, except to the extent such cash payment will result in adverse tax consequences under Code Section 409A). Such TimkenSteel Performance Shares will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Performance Shares to which they relate (including the right to receive dividends or other distributions paid on TimkenSteel Common Shares). Each Timken Performance Share will continue to be one Bearings Performance Share which will be subject to the same vesting requirements and dates and other terms and conditions as the Timken Performance Shares to which it relates.

(d) In the event a change in control (as defined in the applicable equity incentive plan or award agreement) occurs with respect to Timken, then (i) any accelerated vesting and/or exercisability applicable to Bearings Equity Compensation Awards held by Bearings Employees and Former Bearings Business Employees shall apply to the TimkenSteel Equity Compensation Awards then held by such individuals, and (ii) all Bearings Equity Compensation Awards then held by TimkenSteel Employees and Former TimkenSteel Business Employees shall fully vest (and, to the extent applicable, become exercisable). In the event a change in control (as defined in the applicable equity incentive plan or award agreement) occurs with respect to TimkenSteel, then (i) any accelerated vesting and/or exercisability applicable to TimkenSteel Equity Compensation Awards held by TimkenSteel Employees and Former TimkenSteel Business Employees shall apply to the Bearings Equity Compensation Awards then held by such individuals, and (ii) all TimkenSteel Equity Compensation Awards then held by Bearings Employees and Former Bearings Business Employees shall fully vest (and, to the extent applicable, become exercisable). Notwithstanding the foregoing, this Section 10.1(b) will not apply to the extent that it would cause adverse tax consequences under Code Section 409A.

(e) Prior to the Distribution Date, TimkenSteel will establish equity compensation plans, so that upon the Distribution, TimkenSteel will have in effect an equity compensation plan that allows grants of equity compensation awards subject to substantially the same terms as those that apply to the corresponding Timken Equity Compensation Awards. From and after the Distribution Date, each TimkenSteel Equity Compensation Award will be subject to the terms of the applicable TimkenSteel equity compensation plan, the award agreement governing such TimkenSteel Equity Compensation Award and any Employment Agreement to which the applicable holder is a party. From and after the Distribution Date, TimkenSteel will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the TimkenSteel Equity Compensation Awards. Timken will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the Bearings Equity Compensation Awards.

-32-

Exhibit 10.2

(f) In all events, the adjustments provided for in this Section 10.1 will be made in a manner that, as determined by Timken, avoids adverse Tax consequences to holders under Code Section 409A.

Section 10.2 Conformity with Non-U.S. Laws. Notwithstanding anything to the contrary in this Agreement, (i) to the extent any of the provisions in this Article X (or any equity award described herein) do not conform with applicable non-U.S. laws (including provisions for the collection of withholding taxes), such provisions shall be modified to the extent necessary to conform with such non-U.S. laws in such manner as is equitable and to preserve the intent hereof, as determined by the parties in good faith, and (ii) the provisions of this Article X may be modified to the extent necessary to avoid undue cost or administrative burden arising out of the application of this Article X to awards subject to non-U.S. laws.

Section 10.3 Tax Withholding and Reporting.

(a) Except as otherwise required by applicable non-U.S. law, the appropriate member of the Bearings Group will be responsible for all payroll taxes, withholding and reporting with respect to Bearings Equity Compensation Awards and TimkenSteel Equity Compensation Awards held by Bearings Employees and Former Bearings Business Employees. Except as otherwise required by applicable non-U.S. law, the appropriate member of the TimkenSteel Group will be responsible for all payroll taxes, withholding and reporting with respect to Bearings Equity Compensation Awards and TimkenSteel Equity Compensation Awards held by TimkenSteel Employees and Former TimkenSteel Business Employees.

(b) If Timken or TimkenSteel determines in its reasonable judgment that any action required under this Article X will not achieve the intended tax, accounting and legal results, including, without limitation, the intended results under Code Section 409A or FASB ASC Topic 718 – Stock Compensation, then at the request of Timken or TimkenSteel, as applicable, Timken and TimkenSteel will mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally-intended results are not fully attainable.

(c) Tax deductions with respect to Bearings Equity Compensation Awards and TimkenSteel Equity Compensation Awards will be allocated in accordance with the Tax Sharing Agreement, dated June 30, 2014, by and between The Timken Company and TimkenSteel Corporation.

Section 10.4 Employment Treatment.

(a) Continuous employment with the TimkenSteel Group and the Bearings Group following the Distribution Date will be deemed to be continuing service for purposes of vesting and exercisability for the TimkenSteel Equity Compensation Awards and the Bearings Equity Compensation Awards. However, in the event that a TimkenSteel Employee terminates employment after the Distribution Date and becomes

-33-

Exhibit 10.2

employed by the Bearings Group, for purposes of Article X, the TimkenSteel Employee will be deemed terminated and the terms and conditions of the applicable performance incentive plan under which grants were made will apply. Similarly, in the event that a Bearings Employee terminates employment after the Distribution Date and becomes employed by the TimkenSteel Group, for purposes of Article X, the Bearings Employee will be deemed terminated and the terms and conditions of the performance incentive plan under which grants were made will apply. Notwithstanding the foregoing, for purposes of this Article X only, if an individual is a Delayed Transfer Employee, such individual will not be considered to have terminated on his or her Applicable Transfer Date. In addition, a non-employee member of the board of directors of Timken or TimkenSteel will be treated in a similar manner to that described in this Section 10.4(a).

(b) If, after the Distribution Date, Timken or TimkenSteel identifies an administrative error in the individuals identified as holding Bearings Equity Compensation Awards and TimkenSteel Equity Compensation Awards, the amount of such awards so held, the vesting level of such awards, or any other similar error, Timken and TimkenSteel will mutually cooperate in taking such actions as are necessary or appropriate to place, as nearly as reasonably practicable, the individual and Timken and TimkenSteel in the position in which they would have been had the error not occurred.

Section 10.5 Payment of Option Exercise Prices. Upon the exercise of a Bearings Option or a TimkenSteel Option, the exercise price of such stock option will be remitted in cash by the option administrator to the issuer of the option (the appropriate member of the Bearings Group or the TimkenSteel Group, as applicable) and the applicable withholding taxes will be remitted in cash by the option administrator to the entity (the appropriate member of the Bearings Group or the TimkenSteel Group, as applicable) responsible for payroll taxes, withholding and reporting with respect to the option pursuant to Section 10.3. Upon vesting or payment, as applicable, of restricted shares, restricted stock units, performance shares or deferred shares, the applicable withholding will be remitted in cash by the administrator to the entity (the appropriate member of the Bearings Group or the TimkenSteel Group, as applicable) responsible for payroll taxes, withholding and reporting with respect to such awards pursuant to Section 10.3. To the extent necessary to provide the withholding amount in cash to the entity responsible for payroll taxes, withholding, and reporting, the issuer of the applicable award will provide the withholding amount in cash. Notwithstanding the foregoing, the method of remittance of the exercise price of any stock option or any applicable withholding taxes may vary for legal or administrative reasons.

Section 10.6 Dividends/Dividend Equivalents. With respect to dividends on TimkenSteel Restricted Shares or dividend equivalents on TimkenSteel Deferred Shares payable by TimkenSteel to a Bearings Employee, TimkenSteel will make such payments to Timken, and Timken will make such payments to such Bearings Employees and will be responsible for payroll taxes, withholding and reporting in accordance with Section 10.3(a). With respect to dividends on Bearings Restricted

-34-

Exhibit 10.2

Shares or dividend equivalents on Bearings Deferred Shares payable by Timken to a TimkenSteel Employee, Timken will make such payments to TimkenSteel, and TimkenSteel will make such payments to such TimkenSteel Employees and will be responsible for payroll taxes, withholding and reporting in accordance with Section 10.3(a).

Section 10.7 Equity Award Administration. TimkenSteel and Timken agree that Computershare Limited will be the administrator and recordkeeper for the TimkenSteel and Bearings Equity Compensation Awards outstanding as of the Distribution for the life of the relevant awards, unless the parties mutually agree otherwise.

Section 10.8 Registration. TimkenSteel will register the TimkenSteel Common Shares relating to the TimkenSteel Equity Compensation Awards and make any necessary filings with the appropriate Governmental Authorities as required under U.S. and foreign securities Laws.

ARTICLE XI
BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-
PARTY CLAIMS

Section 11.1 General Principles. From and after the Distribution Date, any services that a member of the TimkenSteel Group will provide to the members of the Bearings Group or that a member of the Bearings Group will provide to the members of the TimkenSteel Group relating to any Benefit Plans will be set forth in the Transition Services Agreements (and, to the extent provided therein, a member of the TimkenSteel Group or the Bearings Group will provide administrative services referred to in this Employee Matters Agreement).

Section 11.2 Benefit Plan Third-Party Claims. Any Third-Party Claim relating to the matters addressed in this Agreement shall be governed by the applicable provisions of the Separation Agreement.

ARTICLE XII
INDEMNIFICATION

Section 12.1 Indemnification. All Liabilities assumed by or allocated to TimkenSteel or the TimkenSteel Group pursuant to this Employee Matters Agreement will be deemed to be TimkenSteel Liabilities for purposes of Article V of the Separation Agreement, and all Liabilities retained or assumed by or allocated to Timken or the Bearings Group pursuant to this Employee Matters Agreement will be deemed to be Bearings Liabilities for purposes of Article V of the Separation Agreement. All such TimkenSteel Liabilities and Bearings Liabilities shall be governed by the applicable indemnification terms of the Separation Agreement.

-35-

Exhibit 10.2

ARTICLE XIII
COOPERATION

Section 13.1 Cooperation. Following the date of this Employee Matters Agreement, Timken and TimkenSteel will, and will cause their respective Subsidiaries, agents and vendors to, use reasonable best efforts to cooperate with respect to any employee compensation, benefits or human resources systems matters that Timken or TimkenSteel, as applicable, reasonably determines require the cooperation of both Timken and TimkenSteel in order to accomplish the objectives of this Employee Matters Agreement. Without limiting the generality of the preceding sentence, (a) Timken and TimkenSteel will cooperate in coordinating each of their respective payroll systems in connection with the transfers of Bearings Employees to the Bearings Group and the Distribution, (b) Timken will, and will cause its Subsidiaries to, transfer records to TimkenSteel as reasonably necessary for the proper administration of the TimkenSteel Benefit Plans, to the extent such records are in Timken’s possession, (c) Timken and TimkenSteel will share, with each other and with their respective agents and vendors (without obtaining releases), all employee, participant and beneficiary information necessary for the efficient and accurate administration of the Benefit Plans, and (d) Timken and TimkenSteel will share such information as is necessary to administer equity awards pursuant to Article X, to provide any required information to holders of such equity awards, and to make any governmental filings with respect thereto.

ARTICLE XIV
MISCELLANEOUS

Section 14.1 Vendor Contracts. Prior to the Distribution, Timken and TimkenSteel will use reasonable best efforts to (a) negotiate with the current Third Party providers to separate and assign the applicable rights and obligations under each group insurance policy, health maintenance organization, administrative services contract, Third Party administrator agreement, letter of understanding or arrangement that pertains to one or more Bearings Benefit Plans and one or more TimkenSteel Benefit Plans (each, a “Vendor Contract”) to the extent that such rights or obligations pertain to TimkenSteel Employees and Former TimkenSteel Business Employees and their respective Plan Payees or, in the alternative, to negotiate with the current Third Party providers to provide substantially similar services to the TimkenSteel Benefit Plans on substantially similar terms under separate contracts with TimkenSteel or the TimkenSteel Benefit Plans and (b) to the extent permitted by the applicable Third Party provider, obtain and maintain pricing discounts or other preferential terms under the Vendor Contracts.

Section 14.2 Further Assurances. Prior to the Distribution, if either party identifies any commercial or other service that is needed to ensure a smooth and orderly transition of its business in connection with the consummation of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Employee Matters Agreement, the parties will cooperate in determining whether

-36-

Exhibit 10.2

there is a mutually acceptable arm’s-length basis on which the other party will provide such service.

Section 14.3 Employment Taxes Withholding Reporting Responsibility. TimkenSteel and Timken hereby agree to follow the standard procedure for United States employment Tax withholding as provided in Section 4 of Rev. Proc. 2004-53, I.R.B. 2004-34. Timken will withhold and remit all employment taxes for the last payroll date preceding the Distribution Date with respect to all current and former employees of Timken and TimkenSteel who receive wages on such payroll date.

Section 14.4 Data Privacy. The parties agree that any applicable data privacy Laws and any other obligations of the TimkenSteel Group and the Bearings Group to maintain the confidentiality of any employee information or information held by any benefit plans in accordance with applicable Law will govern the disclosure of employee information among the parties under this Employee Matters Agreement. TimkenSteel and Timken will ensure that they each have in place appropriate technical and organizational security measures to protect the personal data of the TimkenSteel Employees, Former TimkenSteel Business Employees, Bearings Employees and Former Bearings Business Employees.

Section 14.5 Third Party Beneficiaries. Nothing contained in this Employee Matters Agreement will be construed to create any third-party beneficiary rights in any Person, including without limitation any TimkenSteel Employee, Bearings Employee, Former Bearings Business Employee, or Former TimkenSteel Business Employee (including any dependent or beneficiary thereof) nor will this Employee Matters Agreement be deemed to amend any Benefit Plan of Timken, TimkenSteel, or their Affiliates or to prohibit Timken, TimkenSteel or their respective Affiliates from amending or terminating any Benefit Plan.

Section 14.6 Effect if Distribution Does Not Occur. If the Distribution does not occur, then all actions and events that are, under this Employee Matters Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution will not be taken or occur except to the extent specifically agreed by the parties.

Section 14.7 Incorporation of Separation Agreement Provisions. The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions will apply as if fully set forth herein (references in this Section 14.7 to an “Article” or “Section” will mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein by reference will be references to the Separation Agreement): Article IV (relating to Further Assurances; Additional Information); Article V (relating to Release; Indemnification; and Guarantees); Article VI (relating to Exchange of Information; Litigation Management; Confidentiality); Article VII (relating to Dispute Resolution); and Article VIII (relating to Miscellaneous).

-37-

Exhibit 10.2

Section 14.8 No Representation or Warranty. Each of Timken (on behalf of itself and each other Bearings Entity) and TimkenSteel (on behalf of itself and each other TimkenSteel Entity) understands and agrees that, except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or in any other Ancillary Agreement, no party (including its Affiliates) to this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement, makes any representation or warranty with respect to any matter in this Employee Matters Agreement, including, without limitation, any representation or warranty with respect to the legal or Tax status or compliance of any Benefit Plan, compensation arrangement or Employment Agreement, and Timken disclaims any and all liability with respect thereto. Except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement, none of Timken, TimkenSteel or any of their respective Subsidiaries (including their respective Affiliates) makes any representation or warranty about and will not have any Liability for (i) the accuracy of or omissions from any information, documents or materials made available in connection with entering into this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement or the transactions contemplated hereby or thereby.

-38-

Exhibit 10.2

Section 14.9

IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed on the date first written above by their respective duly authorized officers.

THE TIMKEN COMPANY

By: /s/ Philip D. Fracassa____________

Name: Philip D. Fracassa

Title: Chief Financial Officer

TIMKENSTEEL CORPORATION

By: /s/ Christopher J. Holding_________

Name: Christopher J. Holding

Title: Executive Vice President and
Chief Financial Officer

[Signature Page to Employee Matters Agreement]

-39-

Exhibit 10.2

Schedule 5.4

Employment Agreements


1.	Employment Agreement, dated as of March 1, by and between Timken and Terry Fearn


2.	Employment Agreement, dated as of June 1, by and between Timken and Kelly Strunck


3.	Employment Agreement, dated as of March 1, 2012, by and between Timken and Marsha Whalen


4.	Employment Agreement, dated as of May 7, 2012, by and between Timken and Marina Zimmerman


5.	Employment Agreement for Less than full time Exempt Employees, dated as of January 1, 2014, by and between Timken and Lisa Bortz


6.	Employment Agreement for Less than full time Exempt Employees, dated as of January 1, 2014, by and between Timken and Karen Hammond


7.	Employment Agreement for Exempt Employees, dated as of March 1, 2008, by and between Timken and Pamela S. Clawson


8.	Employment Agreement for Exempt Employees, dated as of June 19, 2001, by and between Timken and Mikel W. Smith


9.	Employment Agreement for Non-Exempt Employees, dated as of March 1, 2007, by and between Timken and Paul R. Bracken


10.	Employment Agreement for Non-Exempt Employees, dated as of October 28, 2013, by and between Timken and Essie Dillard


11.	Employment Agreement for Non-Exempt Employees, dated as of October 10, 2011, by and between Timken and Dianne Gary


12.	Employment Agreement for Non-Exempt Employees, dated as of August 1, 2013, by and between Timken and Joe Owens


13.	Employment Agreement for Non-Exempt Employees, dated as of August 1, 2013, by and between Timken and Doug Sikora


14.	Employment Agreement for Non-Exempt Employees, dated as of May 1, 2009, by and between Timken and Daniel L. Smith


15.	Letter regarding Repatriation to Canton, Ohio, USA, dated February 4, 2013, with Kevin Raketich


16.	Letter regarding International Temporary Assignment to Nagoya, Japan, dated May 21, 2012, with Kevin A. Simms


17.	Letter regarding International Temporary Assignment to Nagoya, Japan, dated July 4, 2011, with Robert Perez

CLI-2213833v3

Exhibit 10.2


18.	Letter regarding Continuing Tax Preparation Services, date August 8, 2012, with Mark C. Stacey


19.	Employee Death Benefit Agreement, dated as of March 9, 2004, by and between Ward J. Timken, Jr. and Timken


20.	Employee Death Benefit Agreement, dated as of June 18, 1991, by and between Charles H. West and Timken


21.	Severance Agreement between William P. Bryan and Timken


22.	Severance Agreement between Frank A. DiPiero and Timken


23.	Severance Agreement between James M. Gresh and Timken


24.	Severance Agreement between Christopher J. Holding and Timken


25.	Severance Agreement between Robert N. Keeler and Timken


26.	Severance Agreement between Thomas D. Moline and Timken


27.	Severance Agreement between Shawn J. Seanor and Timken


28.	Severance Agreement between Ward J. Timken, Jr. and Timken


29.	Severance Agreement between Donald L. Walker and Timken

CLI-2213833v3 -2-

Exhibit 10.2

Schedule 6.1(a)

Split Retiree Welfare Plans


1.	The Timken Company Welfare Benefit Plan for Retirees, subject to the following changes:


a.	The MPB retiree death benefit will not be provided;


b.	The default claims and appeals procedures will be amended to comply with new requirements under the Patient Protection and Affordable Care Act, as amended (“PPACA”);


c.	The list of participating employers will be modified; and


d.	Certain other inapplicable provisions will be deleted from the plan.


2.	The Timken Company Bargaining Unit Welfare Benefit Plan for Retirees, subject to the following changes:


a.	The default claims and appeals procedures will be amended to comply with new requirements under PPACA; and


b.	Certain other inapplicable provisions will be deleted from the plan.

CLI-2213833v3 -3-

Exhibit 10.2

Schedule 6.1(b)

Split Welfare Plans


1.	The Timken Company Welfare Benefit Plan for Employees, subject to the following changes:


a.	Medical and dental insurance for certain foreign-based employees will not be provided;


b.	Hourly Supplemental Unemployment Income benefits will not be provided;


c.	The list of participating employers will be modified;


d.	The default claims and appeals procedures will be amended to comply with new requirements under PPACA; and


e.	Certain other inapplicable provisions will be deleted from the plan.


2.	The Timken Company Bargaining Unit Welfare Benefit Plan for Employees, subject to the following changes:


a.	Group AD&D insurance will not be provided;


b.	Dependent life insurance will not be provided;


c.	The default claims and appeals procedures will be amended to comply with new requirements under PPACA; and


d.	Certain other inapplicable provisions will be deleted from the plan.


3.	The Timken Company Flexible Benefits Program for Salaried and Certain Hourly Employees, subject to the following changes:


a.	The list of participating employers will be modified; and


b.	Certain other inapplicable provisions will be deleted from the plan.


4.	The Timken Company Flexible Benefits Program for Certain Bargaining Unit Employees, subject to the following changes:


a.	The list of participating employers will be modified; and


b.	Certain other inapplicable provisions will be deleted from the plan.

CLI-2213833v3 -4-

Exhibit 10.2


5.	Supplemental Unemployment Benefit Plan for Employees Represented by the United Steelworkers Union (the “SUB Plan”), subject to the following changes:


a.	The maximum benefit limits will be modified.

CLI-2213833v3 -5-

Exhibit 10.2

Schedule 7.1(a)

Split DB Plans


1.	The Timken-Latrobe-MPB-Torrington Retirement Plan


2.	The Timken Company Pension Plan

CLI-2213833v3 -6-

Exhibit 10.2

Schedule 8.1(a)

Split DC Plans


1.	The Timken Company Savings and Investment Pension Plan


2.	The Timken Company Voluntary Investment Pension Plan


3.	The Timken Company Savings Plan for Certain Bargaining Associates

CLI-2213833v3 -7-

Exhibit 10.2

Schedule 8.3

Assumed DC Plans


1.	Timken Latrobe Steel Voluntary Investment Program


2.	The OH&R Investment Plan

CLI-2213833v3 -8-

Exhibit 10.2


3.

Schedule 9.1(a)

Split Nonqualified Plans


1.	The Timken Company 1996 Deferred Compensation Plan for officers and other key employees


2.	Amended and Restated Supplemental Pension Plan of the Timken Company

CLI-2213833v3 -9-

Exhibit 10.2

Schedule 9.1(c)

TimkenSteel Excess Benefit Agreements


1.	Amended and Restated Employee Excess Benefits Agreement, dated as of December 17, 2008, by and between Ward J. Timken, Jr. and Timken


2.	Amended and Restated Employee Excess Benefits Agreement, dated as of December 4, 2008, by and between Donald L. Walker and Timken, as amended by Amendment No. 1 to the Employee Excess Benefits Agreement, dated as of August 14, 2009, by and between Donald L. Walker and Timken

Amended and Restated Employee Excess Benefits Agreement, dated as of December 3, 2008, by and between Salvatore J. Miraglia Jr. and Timken, as amended by an Amendment to the Employee Excess Benefits Agreement, dated as of December 21, 2011, by and between Salvatore J. Miraglia Jr. and Timken, and as further amended by an Amendment to the Employee Excess Benefits Agreement, dated as of April 5, 2012, by and between Salvatore J. Miraglia Jr. and Timken


4.	Employee Excess Benefits Agreement, dated as of August 13, 1987, by and between C. H. West and Timken


5.	Employee Excess Benefits Agreement, dated as of January 1, 1990, by and between B. J. Bowling and Timken


6.	Employee Excess Benefits Agreement, dated as of August 6, 1991, by and between C. Philip Weigel and Latrobe Steel Company

CLI-2213833v3 -10-

Exhibit 10.3

TRANSITION SERVICES AGREEMENT

BETWEEN

THE TIMKEN COMPANY

AND

TIMKENSTEEL CORPORATION

Dated June 30, 2014

TABLE OF CONTENTS


ARTICLE I	DEFINITIONS 1


Section 1.1	Definitions 1


ARTICLE II	PERFORMANCE AND SERVICES 3


Section 2.1	General 3


Section 2.2	Additional Services 4


Section 2.3	Service Requests 4


Section 2.4	Access 5


Section 2.5	Books and Records; Retention and Transfer of Materials and Service Recipient Data 5


ARTICLE III	SERVICE QUALITY; INDEPENDENT CONTRACTOR 6


Section 3.1	Service Quality 6


Section 3.2	Independent Contractor; Assets 7


Section 3.3	Uses of Services 7


Section 3.4	Transition of Responsibilities 7


Section 3.5	Disclaimer of Warranties: Force Majeure 7


ARTICLE IV	FEES; PAYMENT 8


Section 4.1	Fees 8


Section 4.2	Taxes 8


Section 4.3	Invoices and Payment 9


Section 4.4	Timing of Payment; No Offsets 9


Section 4.5	Non-Payment 9


Section 4.6	Payment Disputes 9


ARTICLE V	CONFIDENTIALITY 10


Section 5.1	Confidentiality 10


Section 5.2	Security 10


ARTICLE VI	TERMINATION 11


Section 6.1	Term 11


Section 6.2	Option to Extend Term 11


Section 6.3	Partial Termination 11


Section 6.4	Termination of Entire Agreement 12


Section 6.5	Procedures on Termination 12


Section 6.6	Effect of Termination 12


ARTICLE VII	INDEMNIFICATION AND DISPUTE RESOLUTION 13


Section 7.1	Limitation of Liability 13


Section 7.2	Indemnification by TimkenSteel 13


Section 7.3	Indemnification by Timken 13


Section 7.4	Exclusive Remedy 14


Section 7.5	Risk Allocation 14


Section 7.6	Indemnification Procedures 14


Section 7.7	Express Negligence 14


Section 7.8	Dispute Resolution 14


ARTICLE VIII	MISCELLANEOUS 14


Section 8.1	Amendment and Modification 14

TABLE OF CONTENTS


Section 8.2	Waiver 15


Section 8.3	Notices 15


Section 8.4	Entire Agreement 15


Section 8.5	No Third-Party Beneficiaries 15


Section 8.6	Governing Law 16


Section 8.7	Assignment 16


Section 8.8	Severability 16


Section 8.9	Execution in Counterparts 16


Section 8.10	Rules of Construction 16


Section 8.11	Successors and Assigns 17


Section 8.12	Performance 17


Section 8.13	No Public Announcement 17

ANNEXES

Annex A Authorized Representatives

Annex B Timken Services and Fees

Annex C TimkenSteel Services and Fees

SCHEDULES

Schedule C.2 Central Yard Commercial Terms

Exhibit 10.3

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT dated June 30, 2014 (this “Agreement”), is between The Timken Company, an Ohio corporation (“Timken”), and TimkenSteel Corporation, an Ohio corporation (“TimkenSteel”). Timken and TimkenSteel are sometimes referred to herein individually as a “Party”, and collectively as the “Parties”.

RECITALS

A. TimkenSteel and Timken are Parties to that certain Separation and Distribution Agreement dated as of the Distribution Date (the “Separation Agreement”).

B. Pursuant to the Separation Agreement, the Parties agreed to separate Timken into two companies (1) TimkenSteel which will own and conduct, directly and indirectly, the Steel Business; and (2) Timken, which will continue to own and conduct, directly and indirectly, the Bearings Business (the “Separation”).

C. In connection with the transactions contemplated by the Separation Agreement and in order to ensure a smooth transition following the Separation, each Party desires that the other Party provide, or cause its Affiliates or contractors to provide, certain transition services.

D. It is the intent of the Parties that the Services be provided at cost, and therefore, the Fees set forth on Annex B and Annex C were calculated to reflect costs.

In consideration of the forgoing and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 Definitions. Unless otherwise defined herein, each capitalized term will have the meaning specified for such term in the Separation Agreement. As used in this Agreement:

“Additional Services” means the Additional Timken Services or the Additional TimkenSteel Services, individually, or the Additional Timken Services and the Additional TimkenSteel Services, collectively, as the context may indicate. Any Additional Services provided pursuant to this Agreement will be deemed to be “Services” under this Agreement.

“Additional TimkenSteel Service” has the meaning set forth in Section 2.2(b).

“Additional Timken Service” has the meaning set forth in Section 2.2(a).

Exhibit 10.3

“Agreement” has the meaning set forth in the Preamble.

“Authorized Representative” means, for each Party, any of the individuals listed on Annex A under the name of such Party.

“Availed Party” has the meaning set forth in Section 5.2(a).

“Fees” means the fees for a particular Service as set forth on Annex B or Annex C as the case may be.

“Force Majeure Events” has the meaning set forth in Section 3.5(b).

“Materials” has the meaning set forth in Section 2.5(a).

“Partial Termination” has the meaning set forth in the Section 6.3(a).

“Party” has the meaning set forth in the Preamble.

“Payment Due Date” has the meaning set forth in Section 4.4.

“Safety and Security Policies” has the meaning set forth in Section 5.2(a).

“Separation” has the meaning set forth in the Recitals.

“Separation Agreement” has the meaning set forth in the Recitals.

“Service Provider” means (a) in the case of Timken Services, Timken or any of its Subsidiaries providing a Timken Service hereunder, or (b) in the case of TimkenSteel Services, TimkenSteel or any of its Subsidiaries providing a TimkenSteel Service hereunder.

“Service Recipient” means (a) in the case of Timken Services, TimkenSteel or any of its Subsidiaries receiving a Timken Service hereunder, or (b) in the case of TimkenSteel Services, Timken or any of its Subsidiaries receiving a TimkenSteel Service.

“Service Recipient Data” means all of the data and information owned and provided solely by the Service Recipient, or created by the Service Provider solely on behalf, or for the benefit, of the Service Recipient (including any such data and information created by the Service Provider or the Service Recipient using the Service Provider’s computer systems or software) in relation to the provision of the Services.

“Service Term” means the term for a particular Service as set forth on Annex B or Annex C, as the case may be.

Exhibit 10.3

“Services” means the Timken Services or the TimkenSteel Services, individually, or the Timken Services and the TimkenSteel Services, collectively, as the context may indicate.

“Systems” has the meaning set forth in Section 5.2(a).

“Term” has the meaning set forth in Section 6.1.

“Term Extension” has the meaning set forth in Section 6.2.

“Timken” has the meaning set forth in the Preamble.

“Timken Services” means the Services generally described on Annex B and any other Service provided by Timken or any of its Subsidiaries pursuant to this Agreement.

“TimkenSteel” has the meaning set forth in the Preamble.

“TimkenSteel Services” means the Services generally described on Annex C and any other Service provided by TimkenSteel or any of its Subsidiaries pursuant to this Agreement.

ARTICLE II
PERFORMANCE AND SERVICES

Section 2.1 General.

(a) During the Term, and subject to the terms and conditions of this Agreement, Timken will use commercially reasonable efforts to provide, or cause to be provided, the Timken Services to TimkenSteel and its Subsidiaries. The applicable Fee for each Timken Service will be the specified Fee for such Timken Service set forth on Annex B, and the applicable Service Term for each Timken Service will be the specified Service Term for such Timken Service set forth on Annex B, in each case, subject to adjustment for each Term Extension as provided in Section 6.2. Notwithstanding anything to the contrary contained herein or on any Annex, Timken will have no obligation under this Agreement to: (i) operate the Steel Business or any portion thereof (it being acknowledged and agreed by Timken and TimkenSteel that providing the Timken Services will not be deemed to be operating the Steel Business or any portion thereof); (ii) advance funds or extend credit to TimkenSteel; (iii) hire new employees for the purpose of providing the Timken Services; (iv) provide Timken Services to any Person other than TimkenSteel Entities; or (v) implement systems, processes, technologies, plans or initiatives developed, acquired or utilized by Timken whether before or after the Distribution Date.

(b) During the Term, and subject to the terms and conditions of this Agreement, TimkenSteel will use commercially reasonable efforts to provide, or cause to be provided, the TimkenSteel Services to Timken and the other Bearings Entities. The applicable Fee for each TimkenSteel Service will be the specified Fee for such

Exhibit 10.3

TimkenSteel Service set forth on Annex C, and the applicable Service Term for each TimkenSteel Service will be the specified Service Term for such TimkenSteel Service set forth on Annex C, in each case, subject to adjustment for each Term Extension as provided in Section 6.2. Notwithstanding anything to the contrary contained herein or on any Annex, TimkenSteel will have no obligation under this Agreement to: (i) operate the Bearings Business or any portion thereof (it being acknowledged and agreed by Timken and TimkenSteel that providing the TimkenSteel Services will not be deemed to be operating the Bearings Business or any portion thereof); (ii) advance funds or extend credit to Timken; (iii) hire new employees for the purpose of providing the TimkenSteel Services; (iv) provide TimkenSteel Services to any Person other than Bearings Entities; or (v) implement systems, processes, technologies, plans or initiatives developed, acquired or utilized by TimkenSteel whether before or after the Distribution Date.

(c) Notwithstanding anything to the contrary in this Agreement, neither Timken nor TimkenSteel (nor any of their respective Subsidiaries) will be required to perform Services hereunder or take any actions relating thereto that conflict with or violate any applicable Law, contract, license, sublicense, authorization, certification or permit.

Section 2.2 Additional Services.

(a) If TimkenSteel reasonably determines that additional transition services (not listed on Annex B) of the type previously provided by the Bearings Group to the Steel Business are necessary to conduct the Steel Business, and TimkenSteel or its Subsidiaries are not able to provide such services to the Steel Business, then TimkenSteel may provide written notice thereof to Timken. Upon receipt of such notice by Timken, if Timken is willing, in its sole discretion, to provide such additional service during the Term, the Parties will negotiate in good faith an amendment to Annex B setting forth the additional service (each such service an “Additional Timken Service”), the terms and conditions for the provision of such Additional Timken Service and the Fees payable by TimkenSteel for such Additional Timken Service, such Fees to be determined on an arm’s-length basis with the intent that they reflect costs.

(b) If Timken reasonably determines that additional transition Services (not listed on Annex C) of the type previously provided by the TimkenSteel Group to the Bearings Business are necessary to conduct the Bearings Business, and Timken or its Subsidiaries are not able to provide such services to the Bearings Business, then Timken may provide written notice thereof to TimkenSteel. Upon receipt of such notice by TimkenSteel, if TimkenSteel is willing, in its sole discretion, to provide such additional service during the Term, the Parties will negotiate in good faith an amendment to Annex C setting forth the additional service (each such service an “Additional TimkenSteel Service”), the terms and conditions for the provision of such Additional TimkenSteel Service and the Fees payable by Timken for such Additional TimkenSteel Service, such Fees to be determined on an arm’s-length basis with the intent that they reflect costs.

Section 2.3 Service Requests. Any requests by a Party to the other Party regarding the Services or any modification or alteration to the provision of the Services must be

Exhibit 10.3

made by an Authorized Representative (it being understood that the receiving Party will not be obligated to agree to any modification or alteration requested thereby). Notwithstanding anything to the contrary hereunder, each Party may avail itself of the remedies set forth in Section 6.4 without fulfilling the notice requirements of this Section 2.3.

Section 2.4 Access.

(a) Subject to Section 5.2, TimkenSteel, at the reasonable request of Timken, will make available on a timely basis to Timken all information reasonably requested by Timken to enable it to provide the Timken Services. TimkenSteel will give Timken and its Affiliates, employees, agents and representatives, as reasonably requested by Timken, reasonable access, during regular business hours and at such other times as are reasonably required, to the premises of the Steel Business for the purposes of providing the Timken Services.

(b) Subject to Section 5.2, Timken, at the reasonable request of TimkenSteel, will make available on a timely basis to TimkenSteel all information reasonably requested by TimkenSteel to enable it to provide the TimkenSteel Services. Timken will give TimkenSteel and its Affiliates, employees, agents and representatives, as reasonably requested by TimkenSteel, reasonable access, during regular business hours and at such other times as are reasonably required, to the premises of the Bearings Business for the purposes of providing the TimkenSteel Services.

Section 2.5 Books and Records; Retention and Transfer of Materials and Service Recipient Data.

(a) For a period of 12 months following termination of this Agreement, the Service Provider will retain all books, records, files, databases or computer software or hardware (including current and archived copies of computer files) (the “Materials”) with respect to matters relating to the Services provided to the Service Recipient hereunder that are in a form and contain a level of detail substantially consistent with the records retention policies of the Service Provider prior to the Distribution Date (unless any such Materials have been delivered to the Service Recipient or the Service Recipient otherwise has a copy of such Materials). The Service Provider will make such Materials available to the Service Recipient for its review, upon reasonable notice, at the Service Recipient’s expense, during regular business hours, including in order to verify disputed charges under Section 4.6. If at any time during the 12-month period following the termination of this Agreement, the Service Recipient reasonably requests in writing that certain Materials be delivered to the Service Recipient, the Service Provider promptly will arrange for the delivery of the requested Materials in a form reasonably requested by the Service Recipient to a location specified by, and at the expense of, the Service Recipient. As promptly as practicable following the expiration of the Service Term (or earlier termination pursuant to Section 6.3) of a Service, the Service Provider will use commercially reasonable efforts to furnish to the Service Recipient, and assist in the

Exhibit 10.3

transition of Materials belonging to the Service Recipient and relating to such Service as clearly identified by the Service Recipient.

(b) The Service Recipient Data will be and will remain the property of the Service Recipient. The Service Provider will use the Service Recipient Data solely to provide the Services to the Service Recipient as set forth herein and for no other purpose whatsoever. During the Term, the Service Provider will, to the extent reasonably practicable, promptly provide the Service Recipient Data to the Service Recipient upon the Service Recipient’s reasonable request and at the Service Recipient’s expense. As promptly as practicable following the termination or expiration of this Agreement for any reason, the Service Provider will use commercially reasonable efforts to deliver to the Service Recipient or destroy (and certify such destruction in writing if so requested by the Service Recipient), at Service Recipient’s option, all Service Recipient Data; provided, however, that the Service Provider will not be required to erase or destroy Service Recipient Data included in computer files stored securely by the Service Provider that are created during automatic system backups.

(c) Notwithstanding anything herein to the contrary, and subject to Section 5.1, the Service Provider may retain copies of the Materials and the Service Recipient Data in accordance with policies and procedures implemented by the Service Provider to comply with applicable Law, professional standards or reasonable business practice, including document retention policies as in effect from time to time and in accordance with past practices. Each Party will use commercially reasonable efforts to provide the other Party with notice of material modifications to its record retention policies in a timely manner.

ARTICLE III
SERVICE QUALITY; INDEPENDENT CONTRACTOR

Section 3.1 Service Quality.

(c) The Service Provider will perform the Services in a manner and quality that is substantially consistent with the Party’s past practice (including as to quantity) in performing the Services for the Business, and in any event in compliance with any terms or service levels set forth on the applicable Annex. The Service Recipient will use the Services in substantially the same manner and on substantially the same scale as they were used by such Party and its Affiliates in the past practice of the Business, prior to the Distribution Date.

(d) Each Party acknowledges and agrees that certain of the Services to be provided under this Agreement have been, and will continue to be provided (in accordance with this Agreement and the Annexes hereto) to the Bearings Business or the Steel Business, as applicable, by Third Parties designated by the Party responsible for providing such Services hereunder. To the extent so provided, the Party responsible for providing such Services will use commercially reasonable efforts to (i) cause such Third Parties to provide such Services under this Agreement and/or (ii) enable the Party

Exhibit 10.3

seeking the benefit of such Services and its Subsidiaries to avail itself of such Services; provided, however, that if any such Third Party is unable or unwilling to provide any such Services, the Parties agree to use their commercially reasonable efforts to determine the manner, if any, in which such Services can best be provided (it being acknowledged and agreed that any costs or expenses to be incurred in connection with obtaining a Third Party to provide any such Services will be paid by the Party to which such Services are provided; provided that the Party responsible for providing such Services will use commercially reasonable efforts to communicate the costs or expenses expected to be incurred in advance of incurring such costs or expenses).

Section 3.2 Independent Contractor; Assets.

(a) The Parties are independent contractors. All employees and representatives of a Party and any of its Subsidiaries involved in providing Services will be under the exclusive direction, control and supervision of the Party or its Subsidiaries (or their subcontractors) providing such Services, and not of the Service Recipient. The Party or its Subsidiaries (or their subcontractors) providing the Services will be solely responsible for compensation of its employees, and for all withholding, employment or payroll taxes, unemployment insurance, workers’ compensation, and any other insurance and fringe benefits with respect to such employees. The Party or its Subsidiaries (or their subcontractors) providing the Services will have the exclusive right to hire and fire any of its employees in accordance with applicable Law. The Service Recipient will have no right to direct and control any of the employees or representatives of the Party or its Subsidiaries (or their subcontractors) providing such Services.

(b) All procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by a Party, any of its Subsidiaries or any Third Party service provider in connection with the provision of the Services hereunder will remain the property of such Party, its Subsidiaries or such service providers and, except as otherwise provided herein, will at all times be under the sole direction and control of such Party, its Subsidiaries or such Third Party service provider. No license under any patents, know-how, trade secrets, copyrights or other rights is granted by this Agreement or any disclosure in connection with this Agreement by either Party.

Section 3.3 Uses of Services. The Service Provider will be required to provide the Services only to the Service Recipient and the Service Recipient’s Subsidiaries in connection with the Service Recipient’s operation of the Business. The Service Recipient may not resell any Services to any Person whatsoever or permit the use of such Services by any Person other than in connection with the operation of the Business in the ordinary course of business.

Section 3.4 Transition of Responsibilities. Each Party agrees to use commercially reasonable efforts to reduce or eliminate its and its Subsidiaries’ dependence on each Service as soon as is reasonably practicable. Each Party agrees to cooperate with the

Exhibit 10.3

other Party to facilitate the smooth transition of the Services being provided to the Service Recipient by the Service Provider.

Section 3.5 Disclaimer of Warranties: Force Majeure.

(a) Except as expressly set forth in this Agreement: (i) each Party acknowledges and agrees that the other Party makes no warranties of any kind with respect to the Services to be provided hereunder; and (ii) each Party hereby expressly disclaims all warranties with respect to the Services to be provided hereunder, as further set forth immediately below.

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT WILL BE PROVIDED AS-IS, WHERE-IS, WITH ALL FAULTS, AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, TITLE OR ANY OTHER WARRANTY WHATSOEVER.

(b) Notwithstanding anything to the contrary contained in this Agreement, neither Party will be liable for any interruption, delay or failure to perform any obligation under this Agreement (but specifically excluding any inability or failure to pay for Services rendered hereunder) when such interruption, delay or failure results from causes beyond such Party’s reasonable control, including any Law or act of any Governmental Authority, riot, terrorism, insurrection or other hostilities, embargo, fuel or energy shortage, equipment breakdowns, power failure, pandemic, epidemic, fire, flood, earthquake or act of God, strikes, lockouts, labor shortages, failure of a Third Party to satisfy its contractual obligations, or any other similar cause (“Force Majeure Events”); provided, however, that the affected Party promptly notifies the other Party, in writing, upon learning of the occurrence of the Force Majeure Event. Subject to compliance with the foregoing, a Party’s obligations hereunder will be postponed for such time as its performance is suspended or delayed on account of the Force Majeure Event and, upon the cessation of the Force Majeure Event, such Party will use commercially reasonable efforts to resume promptly its performance hereunder.

ARTICLE IV
FEES; PAYMENT

Section 4.1 Fees. The Service Recipient will pay the Service Provider the Fees for the Services provided by such Service Provider under this Agreement. The Fees for the Timken Services are set forth on Annex B and the Fees for the TimkenSteel Services are set forth on Annex C, in each case, subject to adjustment for each Term Extension as provided in Section 6.2.

Section 4.2 Taxes. To the extent required or permitted by applicable Law, there will be added to any Fees due under this Agreement, and each Party agrees to pay to the

Exhibit 10.3

other, amounts equal to any taxes, however designated or levied, based upon such Fees, or upon this Agreement or the Services provided under this Agreement, or their use, including state and local privilege or excise taxes based on gross revenue and any taxes or amounts in lieu thereof paid or payable by the Service Provider hereunder. In the event taxes are not added to an invoice from the Service Provider hereunder, the Service Recipient is responsible to remit to the appropriate tax jurisdiction any additional amounts due including tax, interest and penalty. The Parties will cooperate with each other to minimize any of these taxes to the extent reasonable. If additional amounts are determined to be due on the Services provided hereunder as a result of an audit by a tax jurisdiction, the Service Recipient hereunder agrees to reimburse the Service Provider for the additional amounts due including tax, interest and penalty. The Party obligated to make such reimbursement will have the right to contest the assessment with the tax jurisdiction at its own expense. The Service Provider hereunder will be responsible for penalty or interest associated with its failure to remit invoiced taxes. The Parties further agree that, notwithstanding the foregoing, neither Party will be required to pay any franchise taxes, taxes based on the income of the other Party or personal property taxes on property owned or leased by a Party and used by such Party to provide Services. Notwithstanding anything else in this Agreement to the contrary, the obligations of this Section 4.2 will remain in effect until the expiration of the relevant statutes of limitation.

Section 4.3 Invoices and Payment. Unless otherwise specified in Annex B or Annex C, within 15 days following the end of each month during the Term (or within 15 days after receipt of a Third Party supplier’s invoice in the case of Services that are provided by a Third Party supplier), the Service Provider will submit to the Service Recipient for payment a written statement of amounts due under this Agreement for such month. The statement will set forth the Fees, in the aggregate and itemized, based on the descriptions set forth on Annex B or Annex C, as the case may be. Each statement will specify the nature of any amounts due for any Fees as set forth on Annex B or Annex C and will contain reasonably satisfactory documentation in support of such amounts as specified therein and such other supporting detail as the Service Recipient may reasonably require to validate such amounts due.

Section 4.4 Timing of Payment; No Offsets. Unless otherwise specified in Annex B or Annex C, each Party will pay all amounts due pursuant to this Agreement no later than 45 days following the end of each month during the Term (or, in the case of Services that are provided by a Third Party supplier, no later than 45 days following the end of the billing period for such Services) (the “Payment Due Date”). Neither Party will offset any amounts owing to it by the other Party or any of its Subsidiaries against amounts payable by such Party hereunder or any other agreement or arrangement. All timely payments under this Agreement will be made without early payment discount.

Section 4.5 Non-Payment. If either Party fails to pay the full amount of any invoice by the Payment Due Date, such failure will be considered a material default under this Agreement. The remedies provided to each Party by this Section 4.5 and by Section

Exhibit 10.3

6.4 will be cumulative with respect to any other applicable provisions of this Agreement. Payments made after the date they are due will bear interest at an annual rate equal to that announced publicly by The Wall Street Journal as its prime rate plus 2.0% (compounded monthly).

Section 4.6 Payment Disputes. The Service Recipient may object to any amounts for any Service invoiced to it at any time before, at the time of, or after payment is made, provided such objection is made in writing to the Service Provider within 60 days following the end of the Term. The Service Recipient will timely pay the disputed items in full while resolution of the dispute is pending; provided, however, that the Service Provider will pay interest at an annual rate equal to the Prime Rate plus 2.0% (compounded monthly) on any amounts it is required to return to the Service Recipient upon resolution of the dispute. Payment of any amount will not constitute approval thereof. Any dispute under this Section 4.6 will be resolved in accordance with the provisions of Section 7.8.

ARTICLE V
CONFIDENTIALITY

Section 5.1 Confidentiality. Each Party agrees that the specific terms and conditions of this Agreement and any information, Service Recipient Data and Materials conveyed or otherwise received by or on behalf of a Party in conjunction herewith are confidential and are subject to the terms of the confidentiality provisions set forth in Section 6.7 of the Separation Agreement.

Section 5.2 Security.

(d) If either Party (including its Affiliates and their employees, authorized agents and subcontractors) is given access to the other Party’s computer systems or software (collectively, “Systems”), premises, equipment, facilities or data in connection with the Transition Services, the Party given access (the “Availed Party”) will comply with (and will cause its Affiliates, and their employees, authorized agents and subcontractors to comply with) all of the other Party’s policies and procedures in relation to the use and access of the other Party’s Systems, premises, equipment, facilities or data (collectively, “Safety and Security Policies”), and will not tamper with, compromise or circumvent any safety, security or audit measures employed by such other Party. The Availed Party will access and use only those Systems, premises, equipment, facilities and data of the other Party for which it has been granted the right to access and use.

(e) Each Party will use commercially reasonable efforts to ensure that only those of its personnel who are specifically authorized to have access to the Systems, premises, equipment, facilities and data of the other Party gain such access, and use commercially reasonable efforts to prevent unauthorized access, use, destruction, alteration or loss of such Systems, premises, equipment, facilities or data (including, in each case, any information contained therein), including notifying its personnel of the restrictions set forth in this Agreement and of the Safety and Security Policies.

Exhibit 10.3

(f) If, at any time, the Availed Party determines that any of its personnel has sought to circumvent, or has circumvented, the Safety and Security Policies, that any unauthorized Availed Party personnel has accessed the Systems, premises, equipment, facilities or data, or that any of its personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of, or damage to, premises, facilities, equipment, data, information or software of the other Party, the Availed Party will promptly terminate any such person’s access to the Systems, premises, equipment, facilities or data and promptly notify the other Party. In addition, such other Party will have the right to deny personnel of the Availed Party access to its Systems, premises, equipment, facilities or data upon notice to the Availed Party in the event that the other Party reasonably believes that such personnel have engaged in any of the activities set forth above in this Section 5.2(c) or otherwise pose a security concern. The Availed Party will use commercially reasonable efforts to cooperate with the other Party in investigating any apparent unauthorized access to such other Party’s Systems, premises, equipment, facilities or data.

(g) If any Systems, premises, equipment or facilities of a Party are damaged (ordinary wear and tear excepted) due to the conduct of the Availed Party or any of its Affiliates, or their employees, authorized agents or subcontractors, the Availed Party will be liable to the other Party for all costs associated with such damage, to the extent such costs exceed any available insurance proceeds.

ARTICLE VI
TERMINATION

Section 6.1 Term. The term of this Agreement (the “Term”) will commence on the Distribution Date and end on the earliest to occur of (a) the two-year anniversary of the Distribution Date, subject to Section 6.2, (b) the date on which the provision of all Services has been terminated by the Parties pursuant to Section 6.3 and (c) the date this Agreement is terminated pursuant to Section 6.4.

Section 6.2 Option to Extend Term. Upon written request from the Service Recipient delivered to the Service Provider no later than 30 days (or such other time specified in Annex B or Annex C with respect to such Service), prior to the end of the Service Term for such Service, the Parties will extend the Service Term of such Service for up to 90 days (or for such other period specified in Annex B or Annex C with respect to such Service), on the terms and conditions contained in this Agreement (such extension, a “Term Extension”). In the event a Term Extension for a Service would exceed the Term of this Agreement, the Term of this Agreement will be extended for the duration of the Term Extension. The Parties agree that, during the Term Extension for a Service, unless otherwise specified in Annex B or Annex C with respect to such Service, the Fees for such Service will be increased by an additional 25% of the Fee for such Service set forth in Annex B or Annex C.

Section 6.3 Partial Termination.

Exhibit 10.3

(a) The Service Recipient will provide no less than 30 days written notice (unless a shorter time is mutually agreed upon by the Parties or unless otherwise specified in Annex B or Annex C with respect to a Service) to the Service Provider of any Services that, prior to the expiration of the Service Term or Term Extension, are no longer needed from the Service Provider, in which case this Agreement will terminate as to such Services (a “Partial Termination”). The Parties will mutually agree as to the effective date of any Partial Termination.

(b) In the event of any termination prior to the scheduled expiration of the Service Term or of any Partial Termination hereunder, with respect to any terminated Services in which the Fee for such terminated Services is charged as a flat monthly rate, if termination occurs other than the end of the month, there will be no proration of the monthly rate. To the extent any amounts due or advances made hereunder related to costs or expenses that have been or will be incurred and that cannot be recovered by the Service Provider, such amounts due or advances made will not be prorated or reduced and the Service Provider will not be required to refund to the Service Recipient any prorated amount for such costs or expenses; and the Service Recipient will reimburse the Service Provider for (i) Service Recipient’s proportional share of any Third Party costs or charges that are required to be paid in connection with the provision of any Services and that cannot be terminated and (ii) any Third Party cancellation or similar charges incurred as a result of the Service Recipient’s early termination.

Section 6.4 Termination of Entire Agreement. Subject to the provisions of Section 6.6, a Party will have the right to terminate this Agreement or effect a Partial Termination effective upon delivery of written notice to the other Party if the other Party:

(a) makes an assignment for the benefit of creditors, or becomes bankrupt or insolvent, or is petitioned into bankruptcy, or takes advantage (with respect to its own property and business) of any state, federal or foreign bankruptcy or insolvency act, or if a receiver or receiver/manager is appointed for all or any substantial part of its property and business and such receiver or receiver/manager remains undischarged for a period of 30 days; or

(b) materially defaults in the performance of any of its covenants or obligations contained in this Agreement (or, in the case of a Partial Termination, with respect to the Services being terminated) and such default is not remedied to the non‑defaulting Party’s reasonable satisfaction within 45 days after receipt of written notice by the defaulting Party informing such Party of such default, or if such default is not capable of being cured within 45 days, if the defaulting Party has not promptly begun to cure the default within such 45-day period and thereafter proceeded with all diligence to cure the same.

Section 6.5 Procedures on Termination. Following any termination of this Agreement or Partial Termination, each Party will cooperate with the other Party as reasonably necessary to avoid disruption of the ordinary course of the other Party’s and its

Exhibit 10.3

Subsidiaries’ businesses. Termination will not affect any right to payment for Services provided prior to termination.

Section 6.6 Effect of Termination. Section 4.1 and Section 4.2 (in each case, with respect to Fees and Taxes attributable to periods prior to termination), Section 2.5, Section 3.2, Section 4.3, Section 4.4, Section 4.6, and Section 6.5, this Section 6.6 and ARTICLE I, ARTICLE V, ARTICLE VII and ARTICLE VIII will survive any termination of this Agreement. In the event of a Partial Termination, this Agreement will remain in full force and effect with respect to the Services which have not been terminated by the Parties as provided herein. For the avoidance of doubt, the termination of this Agreement with respect to the Services provided under one Annex, but not the other Annex, will not be a termination of this Agreement.

ARTICLE VII
INDEMNIFICATION AND DISPUTE RESOLUTION

Section 7.1 Limitation of Liability.

(c) No Party nor any of such Party’s Affiliates will be liable, whether in contract, tort (including negligence and strict liability) or otherwise, for any special, indirect, punitive, incidental or consequential damages whatsoever that in any way arise out of, relate to, or are a consequence of, its performance or nonperformance hereunder, or the provision of or failure to provide any Service hereunder, including loss of profits, diminution in value, business interruptions and claims of customers, whether or not such damages are foreseeable or any Party has been advised of the possibility or likelihood of such damages.

(d) Except for Liabilities arising out of or related to the gross negligence, willful misconduct or bad faith of the defaulting Party or in respect of Section 5.2(d) or ARTICLE VII, in no event will a Party’s aggregate liability arising under or in connection with this Agreement (or the provision of Services hereunder) exceed the Fees paid or payable to such Party from the other Party pursuant to this Agreement in respect of the Service from which such Liability flows.

(e) Each Party will use commercially reasonable efforts to mitigate the Liabilities for which the other is responsible hereunder.

Section 7.2 Indemnification by TimkenSteel. TimkenSteel will indemnify, defend and hold harmless each of the Bearings Indemnified Parties for any Liabilities attributable to any Third-Party Claims asserted against them to the extent arising from or relating to: (i) any material breach of this Agreement by TimkenSteel; (ii) any gross negligence, willful misconduct or bad faith by TimkenSteel, the other TimkenSteel Entities, or its or their employees, suppliers or contractors, in the provision of the TimkenSteel Services by TimkenSteel, the other TimkenSteel Entities or its or their employees, suppliers or contractors pursuant to this Agreement; and (iii) the provision of the Timken Services by Timken, the other Bearings Entities or its or their employees, suppliers or contractors,

Exhibit 10.3

except to the extent that such Third-Party Claims for Liabilities are Finally Determined to have arisen out of the material breach of this Agreement, gross negligence, willful misconduct or bad faith of Timken, the other Bearings Entities or its or their employees, suppliers or contractors in providing the Timken Services.

Section 7.3 Indemnification by Timken. Timken will indemnify, defend and hold harmless each of the TimkenSteel Indemnified Parties for any Liabilities attributable to any Third-Party Claims asserted against them to the extent arising from or relating to: (i) any material breach of this Agreement by Timken; (ii) any gross negligence, willful misconduct or bad faith by Timken, the other Bearings Entities, or its or their employees, suppliers or contractors, in the provision of the Timken Services by Timken, the other Bearings Entities or its or their employees, suppliers or contractors pursuant to this Agreement; and (iii) the provision of the TimkenSteel Services by TimkenSteel, the other TimkenSteel Entities or its or their employees, suppliers or contractors, except to the extent that such Third-Party Claims for Liabilities are Finally Determined to have arisen out of the material breach of this Agreement, gross negligence, willful misconduct or bad faith of TimkenSteel, the other TimkenSteel Entities or its or their employees, suppliers or contractors in providing the TimkenSteel Services.

Section 7.4 Exclusive Remedy. Except for equitable relief and rights pursuant to Section 4.2, Section 4.5 or ARTICLE V, the indemnification provisions of this ARTICLE VII will be the exclusive remedy for breach of this Agreement.

Section 7.5 Risk Allocation. Each Party agrees that the Fees charged under this Agreement reflect the allocation of risk between the Parties, including the disclaimer of warranties in Section 3.5(a) and the limitations on liability in Section 7.1. Modifying the allocation of risk from what is stated here would affect the Fees that each Party charges, and in consideration of those Fees, each Party agrees to the stated allocation of risk.

Section 7.6 Indemnification Procedures. All claims for indemnification pursuant to Section 5.2(d) or this ARTICLE VII will be made in accordance with the provisions set forth in Article V of the Separation Agreement. Notwithstanding anything to the contrary hereunder, neither Party may assert against the other Party or submit to arbitration or legal proceedings any cause of action, dispute or claim for indemnification which accrued more than two years after the later of (a) the occurrence of the act or event giving rise to the underlying cause of action, dispute or claim and (b) the date on which such act or event was, or should have been, in the exercise of reasonable due diligence, discovered by the Party asserting the cause of action, dispute or claim.

Section 7.7 Express Negligence. THE INDEMNITY, RELEASES AND LIMITATIONS OF LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLE II AND THIS ARTICLE VII) ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES

Exhibit 10.3

BECAUSE OF THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.

Section 7.8 Dispute Resolution. Except for claims arising under ARTICLE V, any Dispute arising out of or relating to this Agreement will be resolved as provided in Article VII of the Separation Agreement.

ARTICLE VIII
MISCELLANEOUS

Section 8.1 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party.

Section 8.2 Waiver. No failure or delay of any Party in exercising any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any Party to any such waiver will be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

Section 8.3 Notices. All notices and other communications hereunder will be in writing and will be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder will be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to Timken:

The Timken Company

4500 Mount Pleasant Street NW

North Canton, Ohio 44720-5450

Attention: Senior Vice President and General Counsel

Facsimile: (234) 262-4249

Exhibit 10.3

if to TimkenSteel:

TimkenSteel Corporation
1835 Dueber Avenue, S.W.

Canton, Ohio 44706-2798

Attention: General Counsel

Facsimile: (330) 471-4041

Section 8.4 Entire Agreement. This Agreement, including the Annexes hereto and the sections of the Separation Agreement referenced herein, constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, discussions, understandings and commitments, written or oral, between the Parties with respect to such subject matter.

Section 8.5 No Third-Party Beneficiaries. Except to the extent otherwise provided in ARTICLE VII, nothing in this Agreement or the Ancillary Agreements, express or implied, is intended to or will confer upon any Person other than the Parties to this Agreement and such Ancillary Agreements and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement or the Ancillary Agreements.

Section 8.6 Governing Law. This Agreement will be governed by and construed and enforced in accordance with the substantive Laws of the State of Ohio, without regard to any conflicts of law provision or rule thereof that would result in the application of the Laws of any other jurisdiction.

Section 8.7 Assignment. Except as specifically provided in this Agreement, neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party to this Agreement or such rights, interests or obligations being so assigned or delegated, and any such assignment without such prior written consent will be null and void. If any Party to this Agreement (or any of its successors or permitted assigns) (a) will consolidate with or merge into any other Person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (b) will transfer all or substantially all of its properties and/or Assets to any Person, then, and in each such case, the Party (or its successors or permitted assigns, as applicable) will ensure that such Person assumes all of the obligations of such Party (or its successors or permitted assigns, as applicable) under this Agreement and all applicable Ancillary Agreements, in which case the consent described in the previous sentence will not be required.

Section 8.8 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will

Exhibit 10.3

not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained in this Agreement.

Section 8.9 Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) will be as effective as delivery of a manually executed counterpart of any such Agreement.

Section 8.10 Rules of Construction. Interpretation of this Agreement will be governed by the following rules of construction: (a) words in the singular will be held to include the plural and vice versa and words of one gender will be held to include the other gender as the context requires, (b) references to the terms Article, Section, paragraph, clause, Exhibit and Schedule are references to the Articles, Sections, paragraphs, clauses, Exhibits and Schedules of this Agreement unless otherwise specified, (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement, including the Annexes, Schedules and Exhibits hereto, (d) references to “$” will mean U.S. dollars, (e) the word “including” and words of similar import when used in this Agreement will mean “including without limitation,” unless otherwise specified, (f) the word “or” will not be exclusive, (g) the word "will" will be construed to have the same meaning and effect as the word "shall"; (h) references to “written” or “in writing” include in electronic form, (i) provisions will apply, when appropriate, to successive events and transactions, (j) the table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement, (k) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement, and (l) a reference to any Person includes such Person’s successors and permitted assigns.

Section 8.11 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties and their successors and permitted assigns; provided, however, that the rights and obligations of either Party under this Agreement will not be assignable by such Party without the prior written consent of the other Party. The successors and permitted assigns hereunder will include any permitted assignee as well as the successors in interest to such permitted assignee (whether by merger, liquidation (including successive mergers or liquidations) or otherwise).

Exhibit 10.3

Section 8.12 Performance. Each Party will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such Party.

Section 8.13 No Public Announcement. Neither Timken nor TimkenSteel will, without the approval of the other, make any press release or other public announcement concerning the transactions contemplated by this Agreement, except as and to the extent that either Party is obligated by Law or the rules of any regulatory body, stock exchange or quotation system, in which case the other Party will be advised and the Parties will use commercially reasonable efforts to cause a mutually agreeable release or announcement to be issued; provided, however, that the foregoing will not preclude communications or disclosures necessary to implement the provisions of this Agreement or to comply with applicable Law, accounting and SEC disclosure obligations or the rules of any stock exchange.

[Signatures on Following Page]

Exhibit 10.3

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

THE TIMKEN COMPANY

By: /s/ Philip D. Fracassa____________

Name: Philip D. Fracassa

Title: Chief Financial Officer

TIMKENSTEEL CORPORATION

By: /s/ Christopher J. Holding_________

Name: Christopher J. Holding

Title: Executive Vice President and
Chief Financial Officer

[Signature page to Transition Services Agreement]

Exhibit 10.3

Annex A

AUTHORIZED REPRESENTATIVES




TIMKEN		TIMKENSTEEL
The Timken Company		TimkenSteel Corporation
4500 Mt. Pleasant Street, NW		1835 Dueber Avenue, SW
North Canton, Ohio 44720		Canton, Ohio 44706

Douglas H. Smith		Raymond V. Fryan
Product Line Vice President - Tapered Roller Bearings		Vice President – Technology and Quality
Douglas.h.smith@timken.com		Raymond.fryan@timkensteel.com


Sandra L. Rapp		Richard E. Hawkins
Vice President - Information Technology		Vice President - Information Technology
Sandra.rapp@timken.com		Rick.hawkins@timkensteel.com


Douglas C. Nelson		Eric D. Murray
Vice President – Total Rewards		General Manager – Total Rewards
Douglas.c.nelson@timken.com		Eric.murray@timkensteel.com


Richard M. Boyer		James M. Gresh
Vice President – Manufacturing		Vice President – Strategy and International
Richard.boyer@timken.com		James.gresh@timkensteel.com


Ted Mihaila		Amanda J. Sterling
Senior Vice President & Controller		Vice President and Corporate Controller
ted.mihaila@timken.com		Amanda.sterling@timkensteel.com

Exhibit 10.3

Annex B

TIMKEN SERVICES AND FEES

Timken will provide TimkenSteel the following specific services as requested by TimkenSteel on the terms specified in this Annex B.

Section B.1



Engineering Services	Description	Fee(s)	Service Term
Global labs and assets	ASPEX lab – Timken will provide services related to ASPEX sample prep, processing, analysis until the TimkenSteel Lab is operational or for the term indicated. Includes three Aspex units and preparation equipment. TimkenSteel associates to operate equipment and to conduct related activities.	$9,675 per month	9 months
	Steel storage capacity - Timken will allow current steel being stored to remain until TimkenSteel storage is ready to transfer steel into new facility or for the term indicated.	No fee	9 months
	Corrosion laboratory - Timken will provide services related to corrosion testing until the TimkenSteel lab is operational or for the term indicated. TimkenSteel associates to operate equipment and to conduct related activities.	$2,700 per month	9 months
	Electron microscopy lab - Timken will provide services related to SEM analysis until the TimkenSteel Lab SEM is operational or for the term indicated.	$2,250 per month	9 months

Exhibit 10.3



Engineering Services	Description	Fee(s)	Service Term
Mechanical testing lab - Timken will provide services related to Mechanical Test until the TimkenSteel lab is operational or for the term indicated. Includes MTS frame, and RR Moore test rig. TimkenSteel associates to operate equipment and to conduct related activities.	$717 per month	9 months
Gleeble – Timken will provide facility / occupation related services related to Gleeble until the TimkenSteel Lab is operational or for the term indicated. TimkenSteel associates will be providing services while on site at WHQ. Timken associates may operate facilities when not being used by TimkenSteel or during off shift.	$533 per month	9 months
Heat treat laboratory - Timken will provide services related to Heat Treatment until the TimkenSteel lab is operational or for the term indicated.	$480 per month	9 months
Ultrasonic laboratory - Timken will provide services related to UT testing and analysis of related results until the TimkenSteel lab is operational or for the term indicated. Note – focus is Sonix1.	$11,250 per month	9 months
Melting laboratory - Timken will provide services related to VIM Melting until the TimkenSteel Lab is operational or for the term indicated. TimkenSteel associates to operate equipment and to conduct related activities.	$5,600 per month	9 months
Rolling Mill - Timken will provide services related to Test Rolling until the TimkenSteel Lab is operational or for the term indicated.	$2,000 per month	9 months

Exhibit 10.3



Engineering Services	Description	Fee(s)	Service Term
Data Transfer – Data transfer for Aspex, SEM, UT and Gleeble assets.	No fee	9 months
Machinability Broaching – Timken will provide services related to machinability testing utilizing the broach. TimkenSteel associates to operate equipment and to conduct related activities.	$1,000 per month	9 months
Laboratory maintenance & repairs – for items beyond normal wear and tear.	Actual costs on a Time and Material basis	9 months
Associate Access to WHQ	Associate Access – Timken will provide associates access to the necessary laboratories for purposes of the Services hereunder. Lab Associates – Treat as contingents, sign in at front desk All other TimkenSteel Associates – Treat as visitors	No fee	9 months
Technical archives	Library services - Timken will provide reasonable access to library catalog documents that are part of the Steel Business.	$750 per month	6 months

Section B.2


1.	TimkenSteel may extend the Service Term for the Services provided under this Section B.2 by delivering a written request to Timken 90 days prior to the end of the Service Term for such Service.



Finance and Facilities Services	Description	Fee(s)	Service Term

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
Payroll	FTS payroll services - Timken will provide all aspects of payroll processing for TimkenSteel company active associates and retirees consistent with existing practices. Includes all internal customer support and external vendor management. TimkenSteel will provide notice to Timken of TimkenSteel’s intention to discontinue use of the payroll services no later than 90 days prior to terminating its use of the payroll services.	$23,000 per month	19 months

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
Finance and accounting support	Financial Close Support - After the Separation, TimkenSteel will require support from certain associates in Timken’s finance and accounting function to participate in TimkenSteel’s annual financial close process. The support tasks required are for the legal entities involved in the Separation and include but are not limited to: • Q2 and year-end financial closing • Q2 and year-end financial carve-out activities • Legal entity and business performance reporting • Preparation of special tax reporting packages • Preparation of special external reporting packages • Preparation of special unit reporting packages Terms of Support • Service will be provided during normal business hours in the location of the associate providing the support. • Timken and TimkenSteel will designate a contact point for services, and all questions and information requests will be submitted and addressed through these contact points. • Timken and TimkenSteel will identify senior members of their respective finance and accounting organizations to act as escalation points to resolve disputes regarding the provision of this service.	No fee; TimkenSteel will reimburse Timken for any non-labor out-of-pocket expenses incurred in the provision of this support.	8 months

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
FTS	Accounts receivable and related services – Timken will provide, using FTS/TERI operations, services related to accounts receivable claims initiation, cash application, past due follow up, and related transactional processing services consistent with existing practices.	$11,220 per month	18 months
	TSBMR document processing – Timken will provide, using FTS/TERI operations, services related to transactional processing of all TSMBR processing tasks related to accounts payable and accounts receivable consistent with existing practices.	$5,610 per month	18 months
	Vendor invoice processing – Timken will, using FTS/TERI operations, post vendor invoices to the accounts payable system consistent with existing practices.	$3,740 per month	18 months
	Purchasing admin – Timken will, using FTS/TERI operations, continue to support purchasing administration tasks consistent with existing practices.	$935 per month	18 months
	Laptop leasing admin – Timken will, continue to manage the TimkenSteel laptop leasing program consistent with existing practices.	$935 per month	18 months

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
UK support	UK finance support – Timken UK Limited will provide finance and accounting support in the UK and will participate in TimkenSteel’s monthly financial close process. The support tasks required include: • Monthly vendor payments and purchase requisitions • Management of lease contracts and payments • Quarterly VAT returns and payments • Management of statutory accounts and statutory tax preparation • Preparation of tax and year-end reporting packages • Management of Pension and FASB 87 • Payroll for local associates and year end payroll submissions • Management of local associate expenses, credit cards, and insurance • Record retention for TimkenSteel • Monthly general ledger account reconciliations per Corporate policy • Monthly load of financial results into HFM for consolidation	$3,000 per month	12 months

Exhibit 10.3

Section B.3


1.	TimkenSteel may extend the Service Term for the Services provided under this Section B.3 by delivering a written request to Timken 90 days prior to the end of the Service Term for such Service.



Information Technology Services	Description	Fee(s)	Service Term
EDI	GenTran EDI systems – Timken will provide continued access, use and production support of services relating to GenTran systems, including: set up of new trading partners, changes to existing partners, responding to inquiries, ensuring that requirements and updates are met, mapping and integration of EDI data to internal systems and providing secure environments.	$2,900 per month	24 months

Exhibit 10.3



Information Technology Services	Description	Fee(s)	Service Term
Mainframe support	Mainframe environment support - Timken will provide continued access, use and production support of services relating to the mainframe environment, including, but not limited to maintenance and operational support for the mainframe application, interfaces, batch jobs, vendor/third party management, access, security, version and change control, patches and updates, performance tuning, database support, hosting, and level 2/3 help desk support for the mainframe system. Mainframe environment support does not include Millennium application licensing and related costs which will be paid by TimkenSteel. Timken will provide notice to TimkenSteel of Timken’s intention to discontinue use of the mainframe services no later than 90 days prior to terminating its use of the mainframe services. If TimkenSteel determines to continue use of the mainframe services, it would be obligated to enter into a separate contract with the third party mainframe service provider.	$38,080 per month for the first 18 months. Rates and utilization levels to be reviewed and adjusted after the first 18 months based on the percent active user population and mainframe cost base.	24 months

Exhibit 10.3



Information Technology Services	Description	Fee(s)	Service Term
Overall support	Application and infrastructure support services - Timken will provide application and infrastructure support services including, but not limited to: • Information security hardware, software, processes and tools (firewalls, scanning, monitoring); • Resources to support OnBase related document processing • Internet, server support, and database support • SharePoint • Mobility environment (MDM service, Mobile Iron) • Data communications networks • Application development and maintenance support including Payroll, HRIS, Recruiting, Benefits Administration, Kronos, Timken Supplier Network, Extensity, SAP (including Basis), HCM, Hyperion and AR Securitization/Subledger • Systems integration/ middleware (MQSeries, BEA, and other related systems) • Unified Communications including telephone forwarding to new Bearing phone numbers and email forwarding to new Steel email accounts • Other applications as requested by TimkenSteel	No fees will be charged for the months of July and August 2014. From the period of September 2014 through January 2015, fees will be $22,400 per month for up to 320 hours of support per month across all functions (no more than 80 hours per month allocated to HR and Payroll functions). Additional hours beyond January 2015 will be charged at $70 per hour up to 160 hours per month (no more than 40 hours per month allocated to HR and Payroll functions), and will be reconciled monthly. Extension will be based on January 15 conditions.	12 months

Section B.4

Exhibit 10.3



Employee Benefits Services	Description	Fee(s)	Service Term
Expatriate Health Insurance	Expatriate Health Insurance Services - Timken will provide expatriate health insurance coverage through its fully insured arrangement with Aetna International for the benefit of Alex Reid, a TimkenSteel expatriate.	$1,758 per month	18 months. No extension permitted

Exhibit 10.3

Annex C

TIMKENSTEEL SERVICES AND FEES

TimkenSteel will provide Timken the following specific services as requested by Timken on the terms specified in this Annex C.

Section C.1



Engineering Services	Description	Fee(s)	Service Term
Global labs and assets	Gleeble – TimkenSteel to provide services while on site at WHQ.	$2,000 per month	6 months
	Melting – TimkenSteel to provide services while on site at WHQ.	$1,500 per heat	9 months
	Rolling Mill – TimkenSteel to provide services while on site at WHQ.	$500 per heat	9 months
	Chemistry laboratory – TimkenSteel will provide services related to Chemical analysis.	$8,000 per month	3 months
	Laboratory maintenance & repairs – for items beyond normal wear and tear of machines.	Actual costs on a Time and Material basis	9 months

Section C.2



Operations Services	Description	Fee(s)	Service Term

Exhibit 10.3



Operations Services	Description	Fee(s)	Service Term
Central tube yard	Central tube yard services – TimkenSteel will provide services, facilities and utilities for storage and operations as described in Schedule C.2 until the Timken tube yard move is completed or for the term indicated. Timken will provide notice to TimkenSteel of Timken’s intention to extend this services no later than 90 days prior to the expiration of these services.	$12.89 per process ton. (A daily process ton total is the summation of all tons received into the storage yard plus all tons pulled from the storage yard which are accounted for in the Timken SAP system. Timken has responsibility for all destination freight costs from the storage yard.)	9 months
GRP	Electricity – TimkenSteel will supply electricity to the GRP facility until separate Timken supply is in place	Fixed electricity rate to be based on current process/contract. (Metered volume from the Canton District Electric invoice based upon the firm GS-4 tariff rate. Electricity usage will be determined based on existing meter into GRP)	12 months; No extension permitted
	Natural gas – TimkenSteel will supply natural gas to the GRP facility until separate Timken supply is in place – this supply arrangement will not exceed the term indicated	Fixed natural gas rate to be based on current process/contract. (Timken is currently charged for the total combined volume of natural gas metered at two locations: main building and heat treat. The total charge will be based upon the NYMEX settle rate for natural gas each month)	4 months; No extension permitted

Exhibit 10.3



Operations Services	Description	Fee(s)	Service Term
Potable water – TimkenSteel will supply potable water to the GRP facility until separate Timken supply is in place – this supply arrangement will not exceed the term indicated	Fixed water rate to be based on current process/contract. (GRP is currently charged for water usage costs through a combination of sub-meter actual and agreed upon allocations.) Water usage will be determined based on existing meter into GRP	4 months; No extension permitted

Section C.3


1.	Timken may extend the Service Term for the Services provided under this Section C.3 by delivering a written request to TimkenSteel 90 days prior to the end of the Service Term for such Service.



Finance and Facilities Services	Description	Fee(s)	Service Term

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
Finance and accounting support	Financial Close Support - After the Separation, Timken will require support from certain associates in TimkenSteel’s finance and accounting function to participate in Timken’s annual financial close process. The support tasks required are for the legal entities involved in the Separation and include but are not limited to: • Q2 and year-end financial closing • Q2 and year-end financial carve-out activities • Legal entity and business performance reporting • Preparation of special tax reporting packages • Preparation of special external reporting packages • Preparation of special unit reporting packages Support for the closing activities will require participation by business employees who immediately prior to the Separation were employed by the following legal entities: • TimkenSteel • EDC, Inc. • TSB Metal Recycling LLC • Timken Communications Company • Timken Boring Specialties LLC Terms of Support • Service will be provided during normal business hours in the location of the associate providing the support. • Timken and TimkenSteel will designate a contact point for services, and all questions and information requests will be submitted and addressed through these contact points. • Timken and TimkenSteel will identify senior members of their respective finance and accounting organizations to act as escalation points to resolve disputes regarding the provision of this service.	No fee; Timken will reimburse TimkenSteel for any non-labor out-of-pocket expenses incurred in the provision of this support	8 months

Exhibit 10.3



Finance and Facilities Services	Description	Fee(s)	Service Term
Facilities Services	Storage – BIC basement – TimkenSteel will allow certain designated areas to be used for short-term storage of Timken’s records and files and space for the Travel department agents of BCD. The designated areas include the Engineering vault (BIC1F), the vault formerly used by Payroll (BIC1U), the Communications vault (BIC1V) and Travel department area of 1000 sq ft.	BIC1F - $1,106 per month BIC1U - $304 per month BIC1V - $231 per month Travel - $667 per month	18 months

Exhibit 10.3

Section C.4



Information Technology Services	Description	Fee(s)	Service Term
Overall support	Application and infrastructure support services - TimkenSteel will provide application and infrastructure support services including, but not limited to: • Information security hardware, software, processes and tools (firewalls, scanning, monitoring); • Resources to support OnBase related document processing • Internet, server support, and database support • SharePoint • Mobility environment (MDM service, Mobile Iron) • Data communications networks • Application development and maintenance support including Payroll, HRIS, Recruiting, Benefits Administration, Kronos, Timken Supplier Network, Extensity, SAP (including Basis), HCM, Hyperion and AR Securitization/Subledger • Systems integration/middleware (MQSeries, BEA, and other related systems) • Unified Communications including telephone forwarding to new Timken phone numbers and email forwarding to new TimkenSteel email accounts • Other applications as requested by Timken	No fees will be charged for the months of July and August 2014. Beginning September 2014, additional fees will be charged at $70 per hour up to 160 hours per month, and will be reconciled monthly. Extension will be based on September 2014 conditions.	12 months

Exhibit 10.3

SCHEDULE C.2

CENTRAL YARD COMMERCIAL TERMS

Scope of Service: TimkenSteel will provide steel storage and product processing services to Timken for steel products that TimkenSteel delivers directly to the Central Yard pursuant to a TimkenSteel order (the “Product”).


1.	Location:

All storage and processing of the Product will be completed within the footprint of the area defined and identified as the “Central Yard” at the TimkenSteel – Gambrinus steel storage yard.


2.	Processing Services:

TimkenSteel will provide the following Product processing services:


a.	Receiving the Product into the Central Yard and acknowledging receipt in Timken’s SAP system;


b.	Storing the Product within the Central Yard, and maintaining mill-supplied identification and segregation of the Product;


c.	Acknowledging, in Timken’s SAP system, of requests for Product transfers and Product shipments;


d.	Pulling from inventory and repackaging Product (including re-bundling, measuring and tagging) to meet Product transfer requirements of SAP signals;


e.	Re-bundling, measuring, tagging and placing in a storage location all residual Product from the repackaged Product;


f.	Recording, in Timken’s SAP system, all transactions created in the pulling of the Product;


g.	Providing logistics services, including obtaining transportation for the Product and loading the Product onto trucks for shipment. Carriers are to be selected and scheduled using a routing guide and procedure provided by Timken.

For the avoidance of doubt, the processing services do not apply to steel that is returned to either TimkenSteel or the Central Yard by Timken.


3.	Product Service Lead Times:


a.	Receipt of the Product: The Product will be stored in the Central Yard and acknowledged in Timken’s SAP system within 24 hours of receipt.


b.	Processing of the Product: The Product will be available for shipment and all transactions will be acknowledged in Timken’s SAP system within seven days of an SAP signal.

Exhibit 10.3


4.	Freight:

Timken will be responsible for all incoming and outgoing freight charges relating to the Product. Unless otherwise specified freight terms will be Collect.


5.	Product Ownership:

Title of the Product will transfer from TimkenSteel to Timken upon receipt of the Product into the Central Yard. All Product stored and processed within the Central Yard will be owned by Timken. Timken will retain ownership of all printers and bar code readers utilized within the Central Yard.


6.	Quality:

TimkenSteel will utilize Timken’s global quality tracking system to address quality issues resulting from the services provided pursuant to this Schedule C.2.

Exhibit 10.4

TRADEMARK LICENSE AGREEMENT

This Trademark License Agreement (the “Agreement”), effective as of June 30, 2014 (the “Effective Date”), is by and between The Timken Company (“Licensor”), an Ohio corporation, and TimkenSteel Corporation, an Ohio corporation (“Licensee”). In this Agreement, Licensor and Licensee are each referred to as a “Party” and together as the “Parties”.

RECITALS

A. Licensee and Licensor are Parties to that certain Separation and Distribution Agreement dated as of the Effective Date (the “Separation Agreement”).

B. Pursuant to the Separation Agreement, the Parties agreed to separate The Timken Company into two companies: (1) TimkenSteel Corporation (Licensee), which will own and conduct, directly and indirectly, the Steel Business (as defined in the Separation Agreement); and (2) The Timken Company (Licensor), which will continue to own and conduct, directly and indirectly, the Bearings Business (as defined in the Separation Agreement) (the “Separation”).

C. The Steel Business historically used certain of the Licensed Marks in the conduct of the Steel Business, including, without limitation, the development, manufacture and sale of high quality steel.

D. The Parties are entering into this Agreement to allow Licensee to use the Licensed Marks owned by Licensor as set forth in this Agreement and to avoid, to the extent possible, any potential trade or customer confusion that might otherwise arise as a result of such use by Licensee following the Effective Date.

In consideration of the foregoing and the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE IDEFINITIONS

For purposes of this Agreement, the following terms have the meaning given them in this Article 1. Other capitalized terms have the meanings given them elsewhere in this Agreement.

1.1 “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by agreement or otherwise.

1.2 “Change of Control” means, with respect to a Party, the occurrence of any of the following events:

1.2.1 the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (an “SEC Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of 30% or more of either: (A) the then-outstanding shares of common stock of the Party or (B) the combined voting power of the then-outstanding voting securities of the Party entitled to

Exhibit 10.4

vote generally in the election of directors (“Voting Shares”); provided, however, that for purposes of this Section 1.2.1, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Party, (ii) any acquisition by the Party, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Party or any Subsidiary of the Party, or (iv) any acquisition by any SEC Person pursuant to a transaction which complies with clauses (A), (B) and (C) of Section 1.2.3;

1.2.2 individuals who, as of the Effective Date, constitute the board of directors of the Party (the “Incumbent Board”) cease for any reason (other than death or disability) to constitute at least a majority of the board of directors of the Party; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Party’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Party in which such individual is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an SEC Person other than the board of directors of the Party;

1.2.3 consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Party (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the shares of common stock of the Party and Voting Shares immediately prior to such Business Combination beneficially own, directly or indirectly, more than 66-2/3% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding Voting Shares, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Party or all or substantially all of the Party’s assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the shares of common stock of the Party and Voting Shares, as the case may be; (B) no SEC Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Party or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding Voting Shares of such entity except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Business Combination, or at the time of the action of the board of directors providing for such Business Combination; or

1.2.4 approval by the shareholders of the Party of a complete liquidation or dissolution of the Party.

1.3 “Identity Standards” means the guidelines agreed to by the Parties from time to time as described in Section 2.4.1, which Licensee shall follow when using the Licensed Marks.

Exhibit 10.4

1.4 “Insolvency Action” means (a) the institution of any case or proceedings to have a Party be adjudicated bankrupt or insolvent, (b) the institution of any case or proceedings under any applicable insolvency law with respect to a Party: (c) seeking relief for a Party under any law relating to relief from debts or the protection of debtors, (d) consenting to the filing or institution of bankruptcy or insolvency proceedings against a Party, (e) filing a petition seeking, or consenting to, relief with respect to a Party under any applicable federal or state law relating to bankruptcy or insolvency, (f) seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for a Party or all or any of the interests of a Party, or (g) a Party making any assignment for the benefit of creditors, admitting in writing the Party’s inability to pay its debts generally as they become due, or taking action in furtherance of any of the foregoing. Notwithstanding the foregoing, the commencement of a reorganization proceeding under Chapter 11 of the Bankruptcy Code, or otherwise taking steps to reorganize or restructure a Party’s business as a going concern, shall not constitute an “Insolvency Action.”

1.5 “Licensed Marks” means (a) the Timken word mark and the foreign language transliterations and foreign character equivalents of Timken shown on Schedule A (the “Timken Mark”) and (b) the TimkenSteel word mark, the design mark versions of TimkenSteel shown on Schedule A, and the foreign language transliterations and foreign character equivalents of TimkenSteel shown on Schedule A (the “TimkenSteel Mark”). If the Parties modify this Agreement to add additional Licensed Marks, they shall indicate on an amended Schedule A whether and in which respects Licensee’s use is exclusive or non-exclusive. For the avoidance of doubt, Licensor’s orange TIMKEN logo is not a Licensed Mark.

1.6 “Marketing Materials” means all advertising and marketing materials, including packaging, tags, labels, advertising, marketing, promotions, displays, display fixtures, instructions, technical sheets, user guides, data sheets, warranties, websites and other materials of any and all types, in any format or media, associated with products or services within the Steel Fields of Use that include any of the Licensed Marks.

1.7 “Person” means, except when used in connection with the definition of Change of Control (Section 1.2), any individual, entity, corporation, partnership, limited partnership, limited liability company, joint venture, syndicate, sole proprietorship, a company with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal representative, regulatory body or agency, government or governmental agency, authority or association or entity, however designated or constituted.

1.8 “Promotional Items” means items bearing any of the Licensed Marks which are sold or given away in connection with the promotion of products or services within the Steel Fields of Use or of Licensee’s corporate identity generally (e.g., pens, mugs, clothing, and comparable items).

1.9 “Steel Fields of Use” means the products and services described on Schedule C.

1.10 “Subsidiary” of any Person means another Person (a) in which the first Person owns, directly or indirectly, an amount of the voting securities, voting partnership interests or other voting ownership sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting securities, interests or ownership, a majority of the equity interests in such other Person), or (b) of which the first Person otherwise has the power to direct the management and policies. A Subsidiary may be owned directly or indirectly by such first Person or by another Subsidiary of such first Person.

1.11 “Territory” means the world.

Exhibit 10.4

1.12 “Trade Name” means a name under which a commercial enterprise operates to identify itself, including but a business name, company name, assumed name, fictitious name or d/b/a (doing business as).

ARTICLE 2

LICENSE

2.1 Scope of License. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee a fully paid up right and license to use the Licensed Marks in the Territory during the Term in connection with manufacturing, distributing, importing, exporting, selling, reselling, supporting, advertising, promoting and marketing Licensee’s business and its products and services, all within the Steel Fields of Use, and all within the limitations described in the remainder of this Article 2 and the other terms and conditions of this Agreement. The license grant includes the limited right to sublicense in accordance with the terms of Section 4.2.2.

2.2 TimkenSteel Mark.

2.2.1 Uses. Licensee may use the TimkenSteel Mark:

(a) as a trademark and service mark for the products and services within the Steel Fields of Use, including, in addition to use directly on or in connection with such products and services, use in Marketing Materials related to such products and services, provided, however, that:

(i) in text, the mark shall always be presented as TimkenSteel, and not Timken Steel, notwithstanding that a design mark version of the TimkenSteel Mark licensed under this Agreement presents the words TIMKEN and STEEL on separate lines;

(ii) in sentence case, TimkenSteel shall always be presented with an upper case T and an upper case S;

(iii) the design mark versions of TimkenSteel shall always be used together with the TS triangle logo owned by Licensor, using any of the logo lockups as shown in Schedule B;

(iv) Licensee shall not imprint or affix the TimkenSteel Mark on or to any Semi-finished Component (as defined on Schedule C) unless Licensee is reasonably assured that the mark will be completely removed as part of the further finishing process or otherwise prior to the component’s finished state of manufacture;

(b) in Trade Names of Licensee and those of its Subsidiaries that both (i) operate primarily in one or more of the Steel Fields of Use, and (ii) do not operate in any Licensor Business as defined in Schedule F; including use on Promotional Items, displays, business cards, stationery and the like, but in any case subject to the provisions of Section 2.4.3; and

Exhibit 10.4

2.2.2 Exclusivity. The license is exclusive for the TimkenSteel Mark. Licensee acknowledges, however, that it may not use the TimkenSteel Mark outside of the Steel Fields of Use.

2.3 Timken Mark.

2.3.1 Uses.

(a) Licensee may use the Timken Mark:

(i) as a trademark on tangible products (not services) in the Steel Fields of Use sold to Licensor and its Subsidiaries as directed by Licensor, imprinted alone or followed immediately by the word “steel” on the products or on labels or tags affixed to the products, but not on Marketing Materials, Promotional Items or other items, or in any other manner; and

(ii) in the timkenalloysteel.com domain name, provided that Licensee may not present any content at such website, but shall ensure that this domain name, if used, resolves directly to the website at timkensteel.com.

(b) For the avoidance of doubt, Licensee may not use the Timken Mark (except as naturally part of the word TimkenSteel) in its Trade Names or those of its Subsidiaries.

2.3.2 Non-exclusivity. The license to the Timken Mark is non-exclusive, except as provided in Section 2.7.

2.4 Usage.

2.4.1 Identity Standards. Licensee shall use the Licensed Marks in accordance with the Identity Standards and shall not use the Licensed Marks except in form, color, style and appearance reasonably consistent with the applicable Identity Standards. Either Party may request a change to the Identity Standards by addressing the request to the Governance Committee (referenced in Section 10.1). A request by Licensee for a change to the Identity Standards will be accepted by Licensor if the result of the change (a) is consistent with the provisions of this Agreement and (b) will not result in a likelihood of confusion with Licensor’s then current or reasonably contemplated identity standards.

2.4.2 Orange. In connection with any use by Licensee of any of the Licensed Marks and with respect to Licensee’s logos, marketing, communication and corporate identity tactics generally, Licensee may use the color orange only as an accent. As a guideline, “accent” is one or more small details which, taken in aggregate, are approximately 5% of any logo, brand communication, tactic or message. The color orange in photographs will not be considered in the foregoing percentage calculation provided the color is incidental or organic to the image. Licensee may use the color orange for personal protective equipment or other safety-related uses if customarily required and if a practical alternative option does not provide commensurate safety advantages, with respect to which this Section 2.4.2 will not apply.

Exhibit 10.4

2.4.3 General Business Reference Use.

(a) Generally. Licensee shall not use the TimkenSteel Mark in a manner that associates or could reasonably be expected to associate the TimkenSteel Mark with products and services outside of the Steel Fields of Use, except if such use (i) is limited to General Business Reference Uses, and (ii) complies with the requirements of Section 2.4.3(c) and Section 2.4.3(d).

(b) General Business Reference Uses. A “General Business Reference Use” means any of the following: (i) tradeshow displays that promote products and services outside of and within the Steel Fields of Use; (ii) Marketing Materials that feature all or a substantial portion of Licensee’s product and service portfolio as a means of informing customers and prospective customers that the featured products and services are manufactured or sold by Licensee; (iii) corporate level advertising that promotes all or a substantial portion of Licensee’s business, as opposed to specific items or categories of items of products and services; (iv) Trade Name use on products, product packaging and product labeling to the extent required under applicable law; and (v) use on business cards and stationery used by employees who market products and services both within and outside the Steel Fields of Use.

(c) Restrictions on General Business Reference Uses. When using the TimkenSteel Mark in a General Business Reference Use, Licensee shall ensure that:

(i) For uses involving products and services both outside and within the Steel Fields of Use: (A) the TimkenSteel Mark is featured no more prominently than in like proportion to the proportion that the products and services within of the Steel Fields of Use bear to the total presentation of all products and services, and (B) the products and services outside the Steel Fields of Use are separated, either physically or by creative layout, from products and services within the Steel Fields of Use;

(ii) For Trade Name uses as contemplated in item (iv) of Section 2.4.3(b) in connection with products or services outside the Steel Fields of Use (but without limiting the applicability of Section 2.2.1(b)), the TimkenSteel Mark is limited in size to that which is necessary to communicate the intended message, which in any event may not exceed any minimum size required by law; and

(iii) Products and services outside of the Steel Fields of Use are not portrayed in a manner that is likely to mislead a customer or prospective customer into believing that such products or services are within the Steel Fields of Use or otherwise branded with the TimkenSteel Mark.

(d) Except for Trade Name uses as contemplated in items (iii) and (iv) of Section 2.4.3(b) (but without limiting the applicability of Section 2.2.1(b)), and then only in the minimum amount reasonably necessary, Licensee shall not use a Licensed Mark in a manner that associates or could reasonably be expected to associate the Licensed Mark with products and services in any Licensor Business.

Exhibit 10.4

2.4.4 Use with Generic Terms. Licensee may use the TimkenSteel Mark along with one or more generic terms, if such term is used in a generic, non-trademark manner (e.g. “TimkenSteel Manufacturing” or “TimkenSteel USA”), provided that such use (a) is in accordance with the terms and conditions of this Agreement and (b) is not deceptive and does not result in substantial instances of actual confusion with Licensor or third parties.

2.4.5 Brand Extension Marks. Licensee may develop and use in the Steel Fields of Use a trademark that is derivative of and includes the TimkenSteel Mark (e.g., TimkenSteel Plus) (a “Brand Extension Mark”), if, in Licensor’s reasonable judgment, Licensee’s use of the Brand Extension Mark: (a) will not infringe upon the rights of third parties in the jurisdictions in which Licensee intends to use the Brand Extension Mark; (b) will not result in a likelihood of confusion with any mark then being used by Licensor, and (c) is otherwise in accordance with the provisions of this Agreement. Licensee shall initiate a request to use any new Brand Extension Mark to the Governance Committee.

2.4.6 Co-branding. Except with the prior written consent of Licensor, Licensee shall not use any Licensed Mark (a) as part of a name or trademark or service mark of a product or service of a third party, or (b) as a trademark or service mark along with or in combination with the trademark or service mark of a third party in connection with Licensee’s products or services.

2.4.7 Notices. Licensee shall use the designations of “SM,” “TM,” and “®” in connection with the Licensed Marks in the manner directed by Licensor. To the extent required by applicable law or as reasonably requested by Licensor in furtherance of strengthening rights in the Licensed Marks, Licensee shall use the following notice, as may be amended from time to time by Licensor, on the Marketing Materials to identify licensed uses under this Agreement and the proprietary rights of Licensor: “TimkenSteel[®] is a [registered] trademark, used under license,” with the use or not of the ® symbol and the word “registered” dependent upon the registered status of the mark.

2.5 Related Provisions.

2.5.1 Logo. Licensee has adopted the logo shown in the Identity Standards for use in connection with its operations (“Logo”). Licensee is the owner of all rights associated with the Logo and will be responsible for the registration and enforcement of those rights. Licensee may, without Licensor’s consent, modify the Logo and develop one or more new logos, provided the modified Logo and any new logos comply with the requirements of this Agreement and will not result in a likelihood of confusion with logos used by Licensor.

2.5.2 Tag Lines. Licensee may, without Licensor’s consent, adopt tag lines and other elements of its communication and identity strategy, provided those tag lines and elements: (a) are consistent with the requirements of this Agreement; (b) will not result in a likelihood of confusion with tag lines and elements being used by Licensor; and (c) will not detract from the effectiveness of the Licensed Marks.

2.5.3 Toll-Free Numbers. As between Licensor and Licensee, Licensor shall own and operate all toll-free numbers, including without limitation, 800, 866, 877, and 888 extensions, which contain numbers that in sequence spell out Timken.

2.5.4 Timken.com. Licensee acknowledges and agrees that Licensor is the owner of and will control all rights and interest in and to domain name registration for, and homepage

Exhibit 10.4

located at, www.timken.com. Licensor shall provide a link on the home page of www.timken.com to the home page of Licensee’s main internet site. The link will be located in the Quick Links area and will use the Logo as the link. This obligation will continue until the earlier of (a) 18 months following the Effective Date or (b) such time as the number of clicks on the link during a calendar month is less than 25% of the number of clicks into the Steel Business pages during the last full calendar month preceding the Effective Date.

2.5.5 Generic Top-Level Domains. Licensee shall not apply for or own the .timken, .timkensteel or any other confusingly similar generic top level domains.

2.5.6 Signs and Identifiers. As soon as practicable after the Effective Date, but no later than six months after the Effective Date, Licensee shall, at its expense, remove all exterior and interior commercial signs and similar identifiers on assets or properties owned or held by it that refer or pertain specifically to Licensor or Licensor’s business.

2.5.7 License Limited to Steel Fields of Use. Notwithstanding any other provision of this Agreement to the contrary, Licensee shall not use the Licensed Marks other than in connection with the Steel Fields of Use. If Licensee desires to add products or services to the Steel Fields of Use, Licensee shall address a request to the Governance Committee.

2.5.8 Licensee’s Other Marks. Licensee shall not develop or use any mark that would result in a likelihood of confusion with the Licensed Marks, other than new marks approved and licensed as Licensed Marks under this Agreement.

2.6 Business Conduct. Licensee and Licensor shall at all times conduct their respective businesses and operations in a manner intended (a) to avoid confusion of the public between the identity, business and activities of Licensee and those of Licensor, and (b) to enhance and support the value and prestige of the Licensed Marks, and so as not to bring disrepute upon the other Party.

2.7 Licensor Restrictions. Licensor shall not use or license any third party the right to use the TimkenSteel Mark in any field of use. Licensor shall not use or license any third party to use the Timken Mark or any confusingly similar mark for (a) Materials (as defined in Schedule C) or (b) finished hydraulic cylinders, raised bore drill rods or blast hole drill pipe in the Steel Fields of Use. Licensee acknowledges that Licensor will continue to use and to license third parties to use the Timken Mark except as prohibited in this Section 2.7.

2.8 Fair Use. Nothing in this Agreement is intended to restrict or limit either Party’s right to make any use of any term or trademark that constitutes fair use under applicable law, including factual historical references.

ARTICLE 3

OWNERSHIP, REGISTRATION AND ENFORCEMENT

3.1 Ownership.

3.1.3 The Parties acknowledge and agree that Licensor is the sole and exclusive owner of all right, title and interest in and to the Licensed Marks and all the goodwill associated therewith, notwithstanding Licensee’s right to register domain names and Trade Names in its own name. Licensee understands, accepts and agrees that its use of the Licensed Marks, including all

Exhibit 10.4

goodwill and any additional value in the Licensed Marks created by such usage of the Licensed Marks, shall inure solely to the benefit of Licensor. Nothing in this Agreement is to be construed as granting to Licensee or retaining by Licensee any right, title or interest in or to the Licensed Marks, other than Licensee’s rights to use the Licensed Marks and to register and use the domain names and Trade Names in accordance with this Agreement.

3.1.4 During the Term and thereafter, Licensee, its Affiliates and sublicensees shall not: (a) use the Licensed Marks except as permitted hereunder; (b) apply to register or cooperate in any effort by any third party to register the Licensed Marks, any trademarks, service marks, domain names or Trade Names containing Licensed Marks, any trademarks, service marks, domain names or Trade Names of Licensor, or any trademarks, service marks, domain names or Trade Names that are confusingly similar to any of the foregoing, anywhere in the world in connection with any products or services, except as specifically permitted under this Agreement during the Term; (c) challenge or participate in any challenge of Licensor’s exclusive rights in the Licensed Marks or any trademarks, service marks, domain names or Trade Names of Licensor; (d) do anything else inconsistent with Licensor’s ownership of the Licensed Marks or any trademarks, service marks, domain names and Trade Names of Licensor; (e) license, authorize, or otherwise permit, its Affiliates, sublicensees or third parties to use the Licensed Marks, except as permitted hereunder; or (f) use, assert, pledge or rely upon the Licensed Marks or this Agreement to incur, secure or perfect any obligation or indebtedness.

3.2 Use by Licensee. Use by Licensee of the Licensed Marks shall qualify as valid use by the Licensor. Licensee shall cooperate in taking any actions reasonably requested by Licensor to establish the use of the Licensed Marks by Licensee, its Affiliates and sublicensees, including signing any document, application, filing or agreement, or providing usage specimens reasonably necessary therefor.

3.3 Registration and Maintenance of Trademark Rights.

3.3.8 Generally. Except for Licensee’s right to register domain names and Trade Names (as provided in Section 3.4), Licensor shall be responsible for performing all searches, prosecution or other procurement, registration, and maintenance of the Licensed Marks. Licensor is the sole Party entitled to procure and register the Licensed Marks, including any Licensed Marks added to this Agreement by amendment, and is the sole and exclusive owner thereof; provided, however, that if Licensor fails to maintain in force a registration of a Licensed Mark in use by Licensee in one or more of the Steel Fields of Use or to diligently prosecute an application filed for registration of a new Licensed Mark, Licensee may take reasonable actions at its sole cost and expense to maintain in force a registration for such Licensed Mark or to prosecute the application filed for the new Licensed Mark, and Licensor shall reasonably cooperate with Licensee in connection therewith.

3.3.9 New Registrations. If a product or service within the Steel Fields of Use is not covered by a trademark registration or pending application in a country in the Territory in which Licensee is using or intends to use a Licensed Mark, Licensee may request that Licensor pursue trademark registration by giving written notice to Licensor specifying the Licensed Mark, the country or countries in which registration is sought, and the products and services within the Steel Fields of Use with which Licensee is using or proposes to use the Licensed Mark. Licensor shall conduct a trademark search and provide a copy of any resulting search report to Licensee. Following its review of such search report, Licensee may request that Licensor apply for registration of the Licensed Mark in one or more of the countries for products and services

Exhibit 10.4

identified in the request, and if, based on the trademark search or other information which it shares with Licensee, Licensor does not reasonably perceive a significant risk associated with use or registration of the Licensed Mark, Licensor shall use commercially reasonable efforts to pursue registration.

3.3.10 Costs. Licensee shall be responsible for and shall reimburse Licensor for all costs and expenses incurred by Licensor in searching, prosecuting or otherwise procuring, registering and maintaining the Licensed Marks for the Steel Fields of Use, including new Licensed Marks added to this Agreement by amendment, including all maintenance and filing fees and reasonable attorneys’ fees associated with those activities. Licensee shall further be responsible for and shall reimburse Licensor for all costs and expenses incurred by Licensor in searching, prosecuting or otherwise procuring, registering and maintaining the marks listed in Schedule E (“Other Marks”), including all maintenance and filing fees and reasonable attorneys’ fees, even though such Other Marks are owned by Licensor and are not Licensed Marks. Licensor shall use a commercially reasonable method to allocate between Licensor and Licensee costs and expenses that are not clearly divisible, such as for application, registration and maintenance fees, and associated professional fees for multiple class registrations. Licensor shall invoice Licensee quarterly for all such costs.

3.3.11 Avoidance of Abandonment by Licensee. To avoid abandonment of any Licensed Marks in the Steel Fields of Use, if Licensee intends to indefinitely cease use of any Licensed Marks in one or more of the Steel Fields of Use, or, after having commenced use of the Licensed Marks in one or more of the Steel Fields of Use, at any time thereafter does not use such Licensed Marks in such Steel Fields of Use for a period of 24 consecutive months, Licensee’s rights under this Agreement to use such Licensed Marks in such Steel Fields of Use shall revert to Licensor without any compensation or limitation. Licensee shall provide Licensor with prior written notice before it ceases use of any Licensed Marks in any one or more of the Steel Fields of Use. Licensee shall not agree with a third party to restrict or forego use of any of the Licensed Marks in any one or more of the Steel Fields of Use except with prior written approval from Licensor.

3.4 Registration and Maintenance of Domain Names and Trade Names. Licensee shall be responsible, at its sole cost and expense, for procuring and maintaining the domain names and Trade Names permitted under this Agreement. Licensee shall promptly notify Licensor any time it has obtained registration of a domain name or Trade Name governed by this Agreement. The notice must include the type of registration, the registration date, the registering office, and the expiration date, if any. If Licensee decides not to renew a domain name or Trade Name incorporating a Licensed Mark, Licensee shall notify Licensor in writing no later than 60 days prior to the renewal deadline. Upon Licensor’s request and at Licensor’s sole cost and expense, Licensee shall transfer to Licensor such domain name or Trade Name registration. Thereafter Licensor may maintain such transferred domain name or Trade Name at its cost in its discretion.

3.5 Protection and Enforcement.

3.5.1 Notice and Consultation. If Licensee becomes aware of any Unauthorized Use with respect to any of the Licensed Marks, or if either Party becomes aware of any Unauthorized Use with respect to any of the Licensed Marks relating to any Steel Fields of Use, then that Party shall promptly notify the other in writing and provide relevant information in its possession relating to such Unauthorized Use, and the Parties shall cooperate and consult in good faith regarding appropriate action to address the Unauthorized Use, consistent with the provisions of

Exhibit 10.4

this Section 3.5. For purposes of this Section 3.5, “Unauthorized Use” means any actual, potential, or threatened infringement, misappropriation, act of unfair competition, or other harmful or wrongful activities by any third party with respect to any of the Licensed Marks.

3.5.2 Routine Preliminary Enforcement. Notwithstanding any other provision of this Section 3.5, to address actions taken by third parties in the Steel Fields of Use which Licensee reasonably believes are impairing or are likely to impair Licensee’s rights with respect to the Licensed Marks, Licensee may pursue administrative proceedings under the ICANN Uniform Domain Name Dispute Resolution Policy, undertake customs enforcement actions, and send communications or notices (e.g., cease and desist letters) to third parties, if Licensee reasonably believes that such action could not reasonably be expected to provide a basis for declaratory judgment jurisdiction by any third party. Licensee is not required to obtain the consent of Licensor prior to taking such action but shall keep Licensor informed of the status and results of such action. If Licensee wishes to have suit filed against a third party, Section 3.5.3 and 3.5.4 shall apply. Licensee shall be liable for all litigation costs and expenses and shall indemnify Licensor according to the procedures set forth in Section 7.1 if a third party commences litigation in response to or relating to an action taken by Licensee pursuant to this Section 3.5.2.

3.5.3 Enforcement by Licensor. Licensor may take such action as it deems appropriate to protect its rights in the Licensed Marks. Licensor shall consult in good faith with Licensee prior to entering into any settlement, consent judgment, or other voluntary final disposition of any action or proceeding that Licensor reasonably believes would materially impair the rights granted to Licensee under this Agreement. If Licensor commences an action or proceeding arising from Unauthorized Use (a “Licensor Action”), Licensor will have the right to control and conduct all negotiations, proceedings, defense and settlement relating to such Licensor Action. The costs associated with and any damages awarded or settlement proceeds recovered in connection with a Licensor Action will be allocated between the Parties based on the relative impact of the Unauthorized Use on the Parties, as determined in Licensor’s reasonable judgment following consideration by the Governance Committee. At Licensor’s expense, Licensee shall provide all assistance reasonably requested by Licensor with respect to such Licensor Action. Licensor may join Licensee as a party to such Licensor Action if, in Licensor’s reasonable judgment, joining Licensee would be beneficial to the outcome of the Licensor Action.

3.5.4 Enforcement by Licensee. If an Unauthorized Use involves use of the Licensed Marks in connection with the Steel Fields of Use, and if such Unauthorized Use persists and Licensor does not commence an action or proceeding under Section 3.5.3 within a reasonable time, Licensee shall have the right to undertake an action or proceeding to address such Unauthorized Use after consulting in good faith with Licensor regarding Licensee’s intended undertaking. Licensee promptly shall advise Licensor of Licensee’s intention to institute any such action or proceeding, and shall provide Licensor an opportunity to voluntarily join in such action or proceeding at Licensor’s expense. If Licensor voluntarily joins in any such action or proceeding, any damages awarded or settlement proceeds recovered shall be allocated between the Parties as specifically provided in the applicable award or settlement, or if not so allocated, then by the Parties in good faith after each Party’s out of pocket expenses are satisfied from the proceeds of the award or settlement (pro-rata if there are insufficient funds). If Licensor chooses not to voluntarily join in any such action or proceeding, then at Licensee’s expense, Licensor shall provide any assistance reasonably requested by Licensee with respect to such action or proceeding, and Licensor shall not oppose the joinder of Licensor by Licensee as a party to such action or proceeding if required by law or the applicable court. In any action or proceeding in

Exhibit 10.4

which Licensor does not voluntarily join, Licensee will retain all damages awarded or settlement proceeds. Licensee shall not enter into any settlement, consent judgment, or other voluntary final disposition of any action or proceeding under this Section 3.5.4 without written approval of Licensor, which shall not be unreasonably conditioned, withheld or delayed.

3.6 Defense and Settlement of IP Allegations.

3.6.1 Notice and Consultation. If Licensee becomes aware of any IP Allegation with respect to any of the Licensed Marks, or if either Party becomes aware of any IP Allegation with respect to any of the Licensed Marks relating to any Steel Fields of Use, then that Party shall promptly notify the other in writing and provide relevant information in its possession relating to such IP Allegation, and the Parties shall cooperate and consult in good faith regarding appropriate action to address the IP Allegation, consistent with the provisions of this Section 3.6. For purposes of this Section 3.6, “IP Allegation” means any allegation or claim by any third party that any of the Licensed Marks is invalid or infringes, dilutes or violates the rights of any third party.

3.6.2 Resolution by Licensor. Licensor will have exclusive control over the resolution of any IP Allegation, including all negotiations, proceedings, defense and settlement, including the right to agree to an injunction against further use of any Licensed Mark at issue or to otherwise settle such IP Allegation, provided that no such settlement, consent judgment, or other voluntary final disposition will require any payment by Licensee without Licensee’s prior written consent. When possible under the circumstances, before agreeing to a settlement, consent judgment, or other voluntary final disposition, Licensor shall advise Licensee regarding any part of such proposed disposition which affects or may reasonably be expected to affect Licensee’s use of any Licensed Mark, and shall consider in good faith any alternative terms proposed by Licensee to preserve Licensee’s right to continue to use the Licensed Marks pursuant to this Agreement without interruption.

3.6.3 Resolution by Licensee. If Licensor does not take reasonable action to resolve an IP Allegation within a reasonable period of time following such notice:

(a) Licensee may assume control over the resolution of such IP Allegation, but solely to the extent such IP Allegation relates to allegations, claims or demands (actual or threatened) against Licensee or any of its Affiliates or sublicensees in the Steel Fields of Use; and

(b) Licensee may, among other options, agree to an injunction against further use of any Licensed Mark by Licensee or any of its Affiliates or sublicensees in the Steel Fields of Use and otherwise settle such IP Allegation with respect to Licensee and its Affiliates and sublicensees in the Steel Fields of Use, provided that such settlement, consent judgment or voluntary final disposition does not bind or apply to Licensor in any manner without Licensor’s prior written consent.

3.6.4 Assistance. Subject to the foregoing, each Party shall provide such assistance as the other Party may reasonably request in connection with the defense or settlement of any IP Allegation.

3.7 Management of the Licensed Marks. In furtherance of the protection and preservation of the Licensed Marks, Licensee agrees to cooperate and provide reasonable assistance with the

Exhibit 10.4

administrative activities involving the Licensed Marks and to comply with all reasonable requests by Licensor to review and evaluate the portfolio of Licensed Marks, including reviews of the current and planned use or abandonment of the Licensed Marks.

3.8 Recordation of Agreement. The Parties recognize that in some countries in the Territory, it may be necessary or desirable to record or register this Agreement, a registered user agreement or other documentation associated with the licenses granted in this Agreement. If Licensor determines that such filing is necessary or desirable, the Parties shall cooperate with respect to the preparation and filing thereof.

ARTICLE 4

ASSIGNMENT AND SUBLICENSING

4.1 By Licensor. Licensor shall not assign this Agreement without the prior written consent of Licensee, except to an Affiliate or as part of a Change of Control of Licensor. No purported assignment in violation of the preceding sentence will be effective. No assignment will be effective until the assignee agrees in writing to be bound by the terms and conditions of this Agreement.

4.2 By Licensee.

4.2.12 Assignment. Licensee shall not assign this Agreement or any of its rights under this Agreement, including the license granted in this Agreement, either expressly or by operation of law, except pursuant to an Approved Change of Control as described in Section 5.5. No purported assignment in violation of the preceding sentence will be effective. No assignment will be effective until the assignee agrees in writing to be bound by the terms and conditions of this Agreement.

4.2.13 Sublicense.

(a) Licensee shall not sublicense its rights under this Agreement or grant any third party the right to use the Licensed Marks except as provided in this Section 4.2.2. No purported sublicense or grant of rights in violation of the preceding sentence will be effective. Licensee shall ensure that any sublicensee (permitted or not) complies with the obligations required to be imposed by the provisions of this Section 4.2.2. The rights granted by Licensee in an authorized sublicense shall be no greater than those granted to Licensee in this Agreement.

(b) Licensee may sublicense to a Subsidiary the right to use the Licensed Marks as a trademark or service mark for the products and services within the Steel Fields of Use for the furtherance of Licensee’s or such Subsidiary’s business or operations. Such sublicense will not include the further right to sublicense, and will not be effective until such Subsidiary agrees in writing that it is subject to the terms and conditions of this Agreement.

(c) Licensee may grant permission to its distributors and sales representatives to use the TimkenSteel Mark in a limited manner incidental to the promotion and sale of TimkenSteel-branded products and services in the Steel Fields of Use, provided that Licensee uses reasonable efforts to have such distributors and sales representatives agree in writing to be bound by terms reasonably designed to obligate

Exhibit 10.4

such distributors and sales representatives to use the TimkenSteel Mark only in a pre-approved manner, to not further grant rights in or sublicense the TimkenSteel Mark, and to reserve all ownership rights in the TimkenSteel Mark to Licensor.

(d) Licensee may grant permission to its suppliers to mark the products in the Steel Fields of Use they supply solely to Licensee with the TimkenSteel Mark, provided that Licensee uses reasonable efforts to have such suppliers agree in writing to be bound by terms reasonably designed to obligate such suppliers to use the TimkenSteel Mark only in a pre-approved manner, to not further grant rights in or sublicense the TimkenSteel Mark, and to reserve all ownership rights in the TimkenSteel Mark to Licensor.

ARTICLE 5

TERM AND TERMINATION

5.1 Term. The Term of this Agreement shall begin on the Effective Date and shall continue perpetually, unless this Agreement is earlier terminated as set forth in Section 5.3 or Section 5.5.

5.2 Non-Material Breach. With respect to a breach of this Agreement that is neither a Material Breach nor a breach of Article 6 (Quality Assurance), a Party may provide the other Party with written notice alleging that the other Party has breached an obligation under the Agreement. The written notice must set forth with particularity a description of the purported breach and requested actions to remedy the breach. The Party accused of breach in such notice will have 30 days from the date of receipt of the notice to cure the breach. If the breach is not capable of being cured within 30 days, the Party accused will have an additional 30 days to cure the breach. The breaching Party shall act in good faith, using commercially reasonable efforts to cure the breach as soon as possible, but not later than 60 days from receipt of the initial notice.

5.3 Termination.

5.3.5 Termination by Licensee. Licensee may terminate this Agreement by giving not less than 90 days’ written notice to Licensor. Licensee’s notice must specify the effective date of termination, which shall not be more than three years following the date of the notice. Licensee shall cease all use of the Licensed Marks by the date of termination indicated in the notice.

5.3.6 Termination by Licensor. Licensor may terminate this Agreement by written notice to Licensee in any of the circumstances described in this Section 5.3.2.

(a) Material Breach. Licensor may terminate this Agreement upon a Material Breach of this Agreement by Licensee if such Material Breach remains uncured or otherwise unresolved for a period of 90 days or more following Licensee’s receipt of written notice from Licensor. The written notice must set forth with sufficient particularity a description of the asserted breach and the proposed actions to be taken to remedy the breach. A “Material Breach” means any of the following:

(i) Licensee’s intentional disregard for or chronic failure to comply with its obligations under Article 6 (Quality Assurance), which failure materially and adversely impacts the Licensed Marks, any other marks of Licensor, or the goodwill associated with any of the foregoing;

Exhibit 10.4

(ii) Licensee’s intentional disregard for or chronic failure to comply with its obligations to use the Licensed Marks in accordance with the requirements of the Identity Standards, which failure materially and adversely impacts the Licensed Marks, any other marks of Licensor, or the goodwill associated with any of the foregoing;

(iii) Licensee’s intentional disregard for or chronic failure to comply with its obligation to remedy breaches that are not Material Breaches, as required by Section 5.2;

(iv) Licensee’s willful misconduct which materially and adversely impacts the Licensed Marks, any other marks of Licensor, or the goodwill associated with any of the foregoing;

(v) Licensee’s knowing use of any Licensed Marks in any fields of use other than the Steel Fields of Use, or Licensee’s knowing use of any other marks of Licensor, except as expressly permitted under this Agreement; or

(vi) Licensee’s purported assignment, sublicense or grant of rights in willful breach of the prohibitions set forth in Section 4.2.

(b) Upon Licensee Ceasing Use of the Licensed Marks. Licensor may terminate this Agreement immediately upon written notice if Licensee ceases or publicly announces its intention to cease substantially all use of all Licensed Marks. Licensor may not exercise this right if Licensee has previously given a notice under Section 5.3.1 that specifies an effective date of termination later than the date of the actual or the announced intended cessation of use.

(c) Upon a Change of Control. Licensor may terminate this Agreement immediately upon a Change of Control of Licensee other than an Approved Change of Control. Upon an Approved Change of Control, Section 5.5 shall immediately apply.

(d) Upon the Occurrence of an Insolvency Action. This Agreement will automatically terminate without the need for any ratifying or other act if and when an Insolvency Action takes place with respect to Licensee.

5.4 Effect of Termination.

5.4.5 Reversion of Rights. Except as otherwise expressly provided in this Agreement, all of Licensee’s rights in this Agreement shall immediately revert to Licensor upon termination of this Agreement. Licensee and its sublicensees shall promptly undertake steps to cease all use of the Licensed Marks by the time periods indicated in this Section 5.4 or, in the case of termination by Licensee under Section 5.3.1, by the date indicated in Licensee’s notice. For so long as Licensee and its sublicensees continue to use the Licensed Marks, whether or not permitted, they shall comply with all provisions of this Agreement applicable to that use, including but not limited to Article 6 (Quality Control).

5.4.6 Time Periods – Other Than Approved Change of Control. Upon termination under Section 5.3.2, Licensee shall, and shall cause all sublicensees to: (a) as soon as reasonably practical, but no later than 30 days following the effective date of termination, cease producing or

Exhibit 10.4

manufacturing, by or on behalf of Licensee, products, Marketing Materials, and Promotional Items using or bearing any of the Licensed Marks, and cease all new use of any of the Licensed Marks; (b) cease registering new domain names and Trade Names and, as soon as reasonably practical, commence the actions described in Section 5.4.3 (for domain names) and 5.4.4 (for Trade Names); and (c) as soon as reasonably practical, but no later than one year following the effective date of the termination, cease all use of the Licensed Marks, including using, selling or otherwise distributing products, Marketing Materials, Promotional Items or any other item bearing or using any of the Licensed Marks, regardless of when produced or manufactured. For the avoidance of doubt, this Section 5.4.2 does not apply to an Approved Change of Control; instead, Section 5.5 applies.

5.4.7 Transfer of Domain Names. Upon termination of this Agreement for any reason, Licensee shall, and shall cause its sublicensees to, take all necessary steps to transfer promptly to Licensor the registrations for all domain names containing the Licensed Marks or marks confusingly similar thereto registered to them or within their power, possession or control.

5.4.8 Amendment or Cancellation of Trade Names. Upon termination of this Agreement for any reason, Licensee shall, and shall cause its sublicensees to, take all necessary steps to cancel or amend all registrations of Trade Names so as to remove the Licensed Marks from such Trade Names.

5.5 Approved Change of Control.

5.5.1 Conversion of Term. In case of an Approved Change of Control of Licensee, the term of this Agreement, including the licenses granted in Article 2, shall cease being a perpetual term and shall immediately convert to a term of three years or such other period as the Parties may agree, calculated from the date of the Approved Change of Control. If the Approved Change of Control is accomplished by way of a transfer of all or substantially all of the assets of Licensee, the assignment of this Agreement will not be effective until the assignee agrees in writing to be bound by all terms, conditions and limitations of this Agreement. Licensee (or its assignee) shall plan its activities so as to have completely ceased using, and to have caused all sublicensees to cease using, the Licensed Marks by the expiration of the term.

5.5.2 Additional Modification. Upon an Approved Change of Control: (i) the license will be limited to use in connection with products and services comparable in kind and quality to those sold by Licensee in the ordinary course at the time of the Approved Change of Control, but all still within the Steel Fields of Use; and (ii) neither Licensee nor, if applicable, its assignee may create new or additional Trade Names using the Licensed Marks.

5.5.3 “Approved Change of Control” means a Change of Control in which, in Licensor’s sole discretion as reflected in a written notice to Licensee: (i) the Person that controls Licensee (or the assignee of Licensee) after such Change of Control is a Person which has provided Licensor with adequate assurances of Licensee’s and such Person’s ability to perform its obligations pursuant to this Agreement, including, but not limited to, such Person’s stability, financial strength, quality controls, business reputation and sales capabilities; and (ii) there will not be any material adverse impact on the Licensed Marks, any other marks of Licensor, or the goodwill associated with any of the foregoing.

Exhibit 10.4

ARTICLE 6

QUALITY ASSURANCE

6.1 Quality of Products and Services.

6.1.9 Quality Standards. Licensee shall use the Licensed Marks only in connection with high-quality products and services that comply with all applicable laws and regulations in the jurisdictions in which such products and services are advertised, marketed, sold, distributed or manufactured. Licensor recognizes that, prior to the Effective Date, the operations now conducted by Licensee used the Licensed Marks in connection with the Steel Fields of Use, and during that period of use the products and services with which the Licensed Marks were used were of acceptable quality. Accordingly, products and services that are at least of equal quality to Licensee’s products and services as of the Effective Date shall generally be considered to comply with the requirements of this Section 6.1.

6.1.10 Quality Systems. Licensee shall maintain throughout the Term an effective system for evaluating, monitoring and ensuring the continuing quality of products and services Licensee sells and offers in connection with the Licensed Marks. With respect to any particular facility where such products are manufactured or processed, or where such services are provided, continued certification of ISO 9001 or its equivalent will be considered sufficient to satisfy this obligation.

6.2 Monitoring.

6.2.7 Reporting. Licensee shall submit reports at least quarterly to Licensor in the form agreed to by the Parties from time to time, sufficient for Licensor to confirm the consistent quality of products and services provided in connection with the use of the Licensed Marks.

6.2.8 Audits. Licensor or its authorized designee may conduct annual quality control audits to inspect plants, facilities, products or services bearing or associated with the Licensed Marks. The scope of the audits will be comparable to those periodically performed by the Bearings Business prior to the Effective Date. In addition, Licensor or its authorized designee may conduct such quality control audits at any of the following times: (a) as the result of a Material Incident; (b) as the result of a new sublicensee or facility associated with the Licensed Marks; or (c) upon an Approved Change of Control of Licensee. A request for audit shall be made at least ten business days prior to the commencement of the audit. Any audit shall be conducted during regular business hours and in a manner designed to minimize disruption to Licensee’s normal business activities.

6.3 Non-Compliance.

6.3.9 “Material Incident” means any one of the following: (a) a series of significant quality problems related to the same root cause, demonstrating a potential failure of Licensee’s quality control system, (b) an unsatisfactory audit conducted pursuant to Section 6.2.2, or (c) the loss of a quality certification described in Section 6.1.2. Licensee shall promptly notify Licensor of the occurrence of a Material Incident.

6.3.10 Notice of Non-Compliance. Licensor may notify Licensee (“Notice of Non-Compliance”) if Licensee or any of its Affiliates or permitted sublicensees is not in compliance

Exhibit 10.4

with the obligations of Section 6.1 or Section 6.2, or if a Material Incident has occurred (“Quality Issue”). The Notice of Non-Compliance must be in writing and must set forth with sufficient particularity a description of the nature of the Quality Issue and any requested action for curing the Quality Issue. Upon Licensee’s receipt of a Notice of Non-Compliance, Licensee shall promptly correct the Quality Issue identified therein by enacting the cure mechanisms described in Section 6.3.3.

6.3.11 Cure of Non-Compliance.

(a) Cure Plan. Licensee shall act in good faith, using commercially reasonable efforts to cure or otherwise resolve all Quality Issues as soon as practicable. If the Quality Issues identified in a Notice of Non-Compliance cannot reasonably be cured or otherwise resolved within 30 days following receipt of such notice, Licensee shall submit to Licensor a written plan to correct the Quality Issues (“Cure Plan”) within 30 days following receipt of the Notice of Non-Compliance. Licensee shall include a Cure Plan in any notification it makes to Licensor of a Material Incident.

(b) Initial Cure Period. After Licensee submits its Cure Plan to Licensor, the Parties shall each appoint a representative to promptly review and discuss in good faith the proposed Cure Plan. When Licensor, in its sole but good faith discretion, has approved the Cure Plan, Licensee shall have 120 days or such longer period as approved by Licensor on a case-by-case basis in its sole but good faith discretion in which to cure the Quality Issues (“Initial Cure Period”).

(c) Additional Cure Period. If the Quality Issues are not capable of being cured, the Cure Plan is not capable of being completely executed within the Initial Cure Period, or the Quality Issues otherwise remain uncured after the expiration of the Initial Cure Period, Licensor and Licensee shall engage the Governance Committee to promptly negotiate in good faith additional cure plans for an additional cure period that may be reasonably necessary and appropriate to correct such Quality Issues. If the Parties are unable to agree on an additional cure plan or additional cure period, Licensor shall, in its sole but good faith discretion, make such determinations.

6.3.12 Failure to Cure; Reinstatement.

(a) If the Quality Issues have not been cured within the time period provided for in the Initial Cure Period and any additional cure period, then such Quality Issues shall be deemed to be uncured (“Uncured Quality Issues”). Licensee shall cease use of the Licensed Marks on or in connection with any products, services and activities that are the subject of the Uncured Quality Issues as soon as reasonably practicable but no later than one year following the date on which such Quality Issues are determined to be Uncured Quality Issues. During such time, Licensee may not create, manufacture, produce, distribute or otherwise use any new Marketing Materials, Promotional Items, or products or services using any Licensed Marks that are associated with the Uncured Quality Issues.

(b) Unless the Agreement has terminated as provided in Article 5, Licensee may continue its efforts toward completing the cure following a failure described in Section 6.3.4(a), and if the Quality Issues are cured to the reasonable satisfaction of

Exhibit 10.4

Licensor, then Licensee’s rights to use the Licensed Marks shall be reinstated from that date forward.

6.4 Sublicensees. For the avoidance of doubt, the obligations of Licensee and the rights of Licensor under this Article 6 apply equally with respect to any sublicensee of Licensee.

6.5 Nothing in this Article 6 shall be deemed to expand the rights of Licensee herein, to limit Licensee’s obligations hereunder, or to preclude Licensor from pursuing any other rights or remedies.

ARTICLE 7

INDEMNIFICATION

7.1 By Licensee. Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates and its and their successors, legal representatives or assigns, and their respective officers, agents, employees and representatives (collectively, “Licensor Indemnitees”), from and against all damages, liabilities, losses, costs and expenses of any and every nature or kind whatsoever, (including reasonable attorneys’ fees and disbursements and all amounts paid in investigation, defense or settlement of the foregoing) (collectively, “Damages”) that any of the Licensor Indemnitees may incur as a result of third-party actions, proceedings or claims to the extent arising out of or in consequence of: (a) the formulation, manufacture, production, packaging, transportation, storage, performance, marketing, merchandising, promotion, advertisement, distribution or sale of any product, material or service by or on behalf of Licensee, its Affiliates or its sublicensees that bear, use or are associated with the Licensed Marks, including, without limitation under any theory of product liability, tort or otherwise, in each instance except to the extent the Damages are attributable to a breach of this Agreement by any Licensor Indemnitee; (b) any breach of this Agreement by Licensee; (c) use of the Licensed Marks by Licensee or its Affiliates or their employees, agents, or sublicensees in a manner which infringes upon the rights of third parties; and (d) any failure by Licensee or its Affiliates or their employees, agents, or sublicensees to comply with applicable law in connection with this Agreement.

7.2 By Licensor. Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates and its and their successors, legal representatives or assigns, and their respective officers, agents, employees and representatives (collectively “Licensee Indemnitees”), from and against all Damages (as defined in Section 7.1) that any of Licensee Indemnitees may incur as a result of third-party actions, proceedings or claims to the extent arising out of or in consequence of: (a) the formulation, manufacture, production, packaging, transportation, storage, performance, marketing, merchandising, promotion, advertisement, distribution or sale of any product, material or service by or on behalf of Licensor, its Affiliates or its licensees (other than Licensee or its Affiliates or their sublicensees) that bear or use the Timken trademark, including, without limitation under any theory of product liability, tort or otherwise, in each instance except to the extent the Damages are attributable to a breach of this Agreement by any Licensee Indemnitee; (b) any breach of this Agreement by Licensor; (c) use of the Licensed Marks by Licensor or its Affiliates or their employees, agents, or sublicensees in a manner which infringes upon the rights of third parties; and (d) any failure by Licensor or its Affiliates or their employees, agents or sublicensees to comply with applicable law in connection with this Agreement.

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

Exhibit 10.4

8.1 Representations and Warranties. Each Party represents and warrants that:

8.1.13 the Party has the full legal right, title, interest, power and authority to enter into this Agreement and to perform its legal obligations hereunder, and has taken all necessary action to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

8.1.14 this Agreement has been duly executed and delivered on behalf of the Party and constitutes a legal, valid, binding obligation, enforceable against the Party in accordance with its terms; and

8.1.15 to the best of the Party’s knowledge and belief, the execution and delivery of this Agreement and the performance of the Party’s obligations hereunder do not conflict with or violate any requirement of applicable laws or regulations and do not conflict with, or constitute a default under, any contractual obligation of the Party.

ARTICLE 9

DISCLAIMER OF WARRANTIES; LIMITATION OF DAMAGES

9.1 Disclaimer. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE LICENSES GRANTED IN THIS AGREEMENT TO LICENSEE ARE GRANTED ON AN “AS IS” BASIS WITH NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, AND LICENSOR, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY EXCLUDES AND DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE LICENSES AND LICENSED MARKS, INCLUDING THOSE REGARDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ENFORCEABILITY AND NON-INFRINGEMENT AND ANY WARRANTIES IMPLIED BY ANY COURSE OF DEALING OR TRADE USAGE.

9.2 LIMITATION OF DAMAGES. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE UNDER ANY CIRCUMSTANCES OR LEGAL THEORY FOR DAMAGES ARISING OUT OF THIS AGREEMENT RELATED TO INCONVENIENCE, DOWNTIME, INTEREST, COST OF CAPITAL, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOSS OF USE, TIME, DATA, OR GOODWILL, OR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, COLLATERAL OR CONSEQUENTIAL DAMAGES, REGARDLESS OF WHETHER SUCH LOSSES ARE FORESEEABLE; PROVIDED, HOWEVER, THAT: (a) TO THE EXTENT AN INDEMNIFIED PARTY IS REQUIRED TO PAY ANY DAMAGES RELATED TO INCONVENIENCE, DOWNTIME, INTEREST, COST OF CAPITAL, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOSS OF USE, TIME, DATA, OR GOODWILL, OR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, COLLATERAL OR CONSEQUENTIAL DAMAGES, TO ANOTHER PERSON IN CONNECTION WITH A THIRD PARTY CLAIM PURSUANT TO SECTION 7.1, SUCH DAMAGES WILL CONSTITUTE DIRECT DAMAGES AS BETWEEN THE PARTIES AND WILL NOT BE SUBJECT TO THE LIMITATION SET FORTH IN THIS SECTION 9.2; AND (b) THIS SECTION 9.2 WILL NOT APPLY TO ANY DAMAGES THAT ARE FINALLY ADJUDICATED BY AN ARBITRATION TRIBUNAL OR COURT OF COMPETENT JURISDICTION TO HAVE ARISEN FROM OR BE RELATED TO GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH ON THE PART OF THE INDEMNIFYING PARTY.

Exhibit 10.4

ARTICLE 10

GOVERNANCE; DISPUTE RESOLUTION

10.1 Governance Committee. The Parties shall form and maintain a committee to oversee the performance of this Agreement (“Governance Committee”). The Governance Committee will be the forum for initiating requests for consents or modifications, overseeing progress on the cure process for any breaches under this Agreement, and for beginning the dispute resolution process. Each Party shall appoint three representatives to the Governance Committee, one each from the strategy management, communications, and legal functions. The committee will meet once each year to discuss generally the performance of the Agreement. The members of the Committee appointed from the Parties’ respective communications functions will act as the primary points of contact between the Parties with respect to the day-to-day performance of the Agreement, and they will convene the full Governance Committee for additional meetings as needed to discuss specific matters at the request of a Party or as otherwise required hereunder.

10.2 Dispute Resolution. The Parties shall use commercially reasonable efforts to resolve expeditiously and on a mutually acceptable negotiated basis any dispute arising under or relating to this Agreement, by following the procedures set forth in this Section 10.2. For the avoidance of doubt, the assertion of breach under this Agreement by one Party is not itself a dispute, and nothing in this Section 10.2 will suspend the time periods by which a breach must be cured, as provided in this Agreement; however, if the Party against which the assertion of breach has been made objects in any respect with the assertion of breach or the cure plan suggested by the other Party, such Party shall use this dispute resolution process to raise and resolve those objections. Each Party agrees that the procedures set forth in this Article 10 will be the exclusive means for resolution of any dispute under this Agreement. The initiation of informal dispute resolution or arbitration under this Agreement will toll the applicable statute of limitations for the duration of any such proceedings.

10.2.1 Notice. The dispute resolution process begins with a written notice from one Party to the other, detailing the nature of the dispute and the outcome desired by the notifying Party. To be effective, the notice must be directed to the lead member of the Governance Committee of the other Party, as provided in Section 12.14.

10.2.2 Meeting of Governance Committee. The Governance Committee shall meet as often as the Parties reasonably deem necessary to attempt to resolve the dispute, including, if the dispute involves an assertion of breach against a Party, developing and overseeing compliance with an appropriate plan to cure the breach.

10.2.3 Cooperation of the Parties. During the course of the Governance Committee negotiation, subject to the Parties’ respective confidentiality obligations, all reasonable requests made by either Party to the other Party for information will be honored in order that the members of the Governance Committee may be fully advised in the matter. The specific format for the Governance Committee’s discussions and negotiations will be left to the discretion of the Governance Committee, but may include the preparation of agreed upon statements of fact or written statements of position furnished to the other Party.

10.2.4 Meeting of CEOs. If the Governance Committee is unable to resolve the dispute within 30 days following the notice of dispute given under Section 10.2.1, or if a resolution agreed to by the Governance Committee fails to resolve the situation, a Party may by formal

Exhibit 10.4

notice pursuant to Section 12.14 refer the matter for resolution by the Chief Executive Officer (CEO) of each Party, each of whom shall have the authority to resolve the dispute on behalf of their Party. The CEOs will promptly meet in person or by phone and attempt to resolve the dispute.

10.2.5 Mediation. If the dispute has not been resolved by the CEOs within 30 days following the formal notice given under Section 10.2.4, either Party may submit the dispute to mediation. The mediation will be conducted in Canton, Ohio by a single mediator from Judicial Arbitration and Mediation Services, Inc. (“JAMS”). The mediator shall be selected by the Parties by mutual agreement from the JAMS neutral panelists “Intellectual Property” list. If the Parties do not agree on the selection of mediator within 30 days following receipt by the Parties of the list of panelists, the mediator shall be selected from the “Intellectual Property” list pursuant to the rules for selection of arbitrators in the JAMS Comprehensive Arbitration Rules and Procedures. The mediator shall have 30 days from the submission to mediation or such longer period as the Parties may mutually agree in writing to attempt to resolve the dispute, and the Parties shall cooperate fully in the mediation process. The Parties will share equally the costs, fees and expenses of the mediator and any payments to JAMS for such mediation.

10.2.6 Except as otherwise independently discoverable, nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences or discussions to settle a Dispute pursuant to this Section 10.2 will be offered or received as evidence or used for impeachment or for any other purpose in any proceedings (including the arbitration proceedings contemplated in Section 10.2.7), but will be considered to have been disclosed for settlement purposes only.

10.2.7 Arbitration. If the mediation contemplated by Section 10.2.5 does not resolve the dispute and a Party wishes to pursue its rights relating to such dispute, then, except as provided in and subject to Section 10.2.8, such dispute will be submitted to final and binding arbitration as provided in this Section 10.2.7. Any Dispute concerning the propriety of the commencement of the arbitration will be finally settled by such arbitration.

(e) The arbitration will be held in Canton, Ohio in accordance with the JAMS Comprehensive Arbitration Rules and Procedures. The arbitration will be conducted by a single arbitrator selected by mutual agreement. If the Parties do not agree on the selection of arbitrator within 30 days following receipt by the Parties of the list of panelists, the arbitrator will be selected from the JAMS “Intellectual Property” list (exclusive of the mediator), pursuant to the JAMS Comprehensive Arbitration Rules and Procedures.

(f) The decision of the arbitrator will be final and non-appealable (other than for fraud) and may be enforced in any court of competent jurisdiction.

(g) The use of any mediation or other “alternative dispute resolution” procedures shall not be construed under the doctrine of laches, waiver or estoppel to adversely affect the rights of any party to the dispute.

(h) The arbitration award shall be issued within 30 calendar days following the final submission of the matter to the arbitrator, and in all events within 6 months following the initiation of the arbitration.

Exhibit 10.4

(i) Discovery shall be allowed only pursuant to Rule 17 of the JAMS Comprehensive Arbitration Rules and Procedures.

(j) The Parties shall share equally the costs and expenses of the arbitrator, but each Party shall bear its own costs associated with participating in the arbitration, including its attorneys’ and experts’ fees, unless the arbitrator decides that one Party should be responsible for all costs and expenses, including the reasonable attorneys’ fees and experts’ fees of the other Party.

10.2.8 Injunctive Relief. Notwithstanding the other provisions of Article 10, at any time during the resolution of a dispute between the parties, either Party may request a court of competent jurisdiction to grant provisional interim relief, including pre-arbitration attachments or injunctions, solely (a) for the purpose of preventing or minimizing irreparable harm for which money damages would not provide adequate relief, or (b) in matters involving the disclosure of such Party’s Confidential Information. A delay in seeking injunctive relief attributable to following the procedures of this Article 10 or otherwise seeking to amicably resolve the dispute with the other Party, shall not serve as a basis to deny injunctive relief. Nothing in this Article 10 shall in any way limit either Party’s rights under to terminate this Agreement as provided in Article 5.

10.2.9 Failure of a Party to Comply with Dispute Resolution Process. If either Party does not act in accordance with this Article 10, then the other Party may seek all remedies available at law or in equity to enforce this Article 10.

10.2.10 Expenses. Except as otherwise provided in this Article 10, each Party will bear its own costs, expenses and attorneys’ fees in pursuit and resolution of any Dispute.

10.2.11 Continuation of Services and Commitments. Unless otherwise agreed in writing, the Parties will, and will cause the members of their respective Groups to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of the dispute resolution pursuant to this Article 10.

ARTICLE 11

CONFIDENTIALITY

11.1 Certain terms and conditions of this Agreement and the information disclosed by or on behalf of one Party to the other Party in connection with the performance of this Agreement constitute “Confidential Information.”

11.2 Each Party:

11.2.1 shall hold, and shall cause its Affiliates and the officers, directors, employees and agents of any of them to hold, all Confidential Information of the other Party in strict confidence, exercising at least the same degree of care that it applies to its own business sensitive and proprietary information; and

Exhibit 10.4

11.2.2 shall not disclose, and shall cause its Affiliates and the officers, directors, employees and agents of any of them to not disclose, the other Party’s Confidential Information to any other Person, except as expressly permitted in this Article 11.

11.3 The obligations of Section 11.2 will not apply:

11.3.1 to the extent that disclosure is compelled by subpoena or other compulsory disclosure notice from a governmental authority or, in the opinion of the receiving Party’s counsel, by other requirements of law, but only after compliance with Section 11.4;

11.3.2 to the extent the receiving Party can show that the Confidential Information was (a) in the public domain through no fault of such Party, its Affiliates, or any of the officers, directors, employees or agents of any of them; (b) later lawfully acquired from other sources by such Party, which sources are not themselves bound by a confidentiality obligation; or (c) independently generated without reference to any proprietary or confidential information of the disclosing Party; or

11.3.3 to the receiving Party’s directors, officers, employees, agents, accountants, counsel and other advisors and representatives who (a) need to know such information for legitimate business purposes, and (b) have been advised of the confidentiality obligations in this Article 11.

11.4 If a Party receives a subpoena or other compulsory disclosure notice from a governmental authority requesting disclosure of Confidential Information that is subject to the confidentiality provisions of this Article 11, such Party shall promptly provide to the other Party a copy of the notice and an opportunity to seek reasonable protective arrangements. If such appropriate protective arrangements are not obtained, the Party that is required to disclose such information shall furnish, or cause to be furnished, only that portion of such Confidential Information that is legally required to be disclosed and shall use reasonable efforts to ensure that confidential treatment is accorded such information.

ARTICLE 12

GENERAL TERMS

12.1 Performance. Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations to be performed by any Subsidiary of such Party under this Agreement.

12.2 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed will be deemed to be an original, but all of which taken together will constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) will be as effective as delivery of a manually executed counterpart.

12.3 Entire Agreement. This Agreement, including its Schedules and the provisions of the Separation Agreement referenced in this Agreement, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements, negotiations, discussions, understandings and commitments, written or oral, between the Parties with respect to such subject matter.

Exhibit 10.4

12.4 Force Majeure. Neither Party shall be liable for any failure of or delay in the performance of its obligations under this Agreement for the period that the failure or delay is due to acts of God, public enemy, war, strikes or labor disputes, or any other cause beyond that Party’s reasonable control. A Party claiming force majeure shall promptly notify the other Party of the occurrence of any such cause and complete the affected performance as soon as practicable.

12.5 Severability. Whenever possible, each provision or portion of a provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. But if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained in this Agreement.

12.6 No Third Party Beneficiaries. Except as otherwise provided in Article 7, nothing in this Agreement, express or implied, is intended to or will confer upon any Person other than the Parties to this Agreement and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

12.7 Amendments and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment and signed by each Party’s authorized representative.

12.8 Waiver. No failure or delay of a Party in exercising any right, power or remedy under this Agreement will operate as a waiver of such right, power or remedy, and no single or partial exercise of or abandonment or discontinuance of steps to enforce any such right, power or remedy, will preclude any other or further exercise of such or any other right, power or remedy. Any agreement on the part of a Party to any such waiver will be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

12.9 Interpretation. Interpretation of this Agreement will be governed by the following rules of construction. (a) Words in the singular will be held to include the plural and vice versa, and words of one gender will be held to include the other gender, as the context requires. (b) References to the terms Article, Section, paragraph, clause, Exhibit and Schedule are references to the Articles, Sections, paragraphs, clauses, Exhibits and Schedules of this Agreement, unless otherwise specified. (c) References to “$” will mean U.S. dollars. (d) The word “including” and words of similar import will mean “including without limitation,” unless otherwise specified. (e) References to “written” or “in writing” include in electronic form. (f) Provisions will apply, when appropriate, to successive events and transactions. (g) The table of contents and headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement. (h) The Parties have each participated in the negotiation and drafting of this Agreement. If an ambiguity or question of interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or in any interim drafts of this Agreement. (i) A reference to a Person includes such Person’s successors and permitted assigns.

12.10 No Agency. This Agreement is not be deemed or construed to create any partnership, joint venture, principal/agent or any other agency relationship between the Parties.

Exhibit 10.4

12.11 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. The successors and permitted assigns of a Party will include any permitted assignee as well as the successors in interest to such permitted assignee, whether by merger or liquidation, including successive mergers or liquidations, or otherwise.

12.12 Survival. The terms and conditions set forth in Section 5.4 (Effect of Termination), Article 7 (Indemnification), Article 9 (Disclaimer of Warranties; Limitation of Damages), Article 11 (Confidentiality), and Article 12 (General Terms), including the related definitions set forth in Article 1, and any other provisions which by their nature are intended to survive termination, shall survive any termination of this Agreement.

12.13 Governing Law and Jurisdiction. This Agreement will be governed by and construed and enforced in accordance with the substantive laws of the State of Ohio, without regard to any conflicts of law rule that would result in the application of the laws of any other jurisdiction. Except as expressly contemplated by another provision of this Agreement, the Parties irrevocably consent and submit to the exclusive jurisdiction of federal and state courts located in Canton, Ohio.

12.14 Notices.

12.14.1 All notices and other communications under this Agreement must be in writing and will be deemed duly given: (a) on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt by facsimile, e-mail or otherwise; (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier; or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices shall be addressed to the parties as provided in Section 12.14.2 and Section 12.14.3. A Party may change its address for notice by written notice given in accordance with the foregoing provisions. Notwithstanding the manner of delivery, whether or not in compliance with the foregoing provisions, any notice, demand or other communication actually received by a Party shall be deemed delivered when so received.

12.14.2 For an initial notice of breach or notice to initiate the dispute resolution process of Section 10.2, the notice shall be directed to the lead member of the Governance Committee for the recipient Party, which initially shall be as follows:

For Licensor: For Licensee:

The Timken Company TimkenSteel Corporation

VP – Communications and Public Relations Vice President – Communications &
Community Relations

Mail Code WHQ-01 Mail Code GNE-14

4500 Mt. Pleasant Street NW 1835 Dueber Avenue SW

North Canton, Ohio 44720 Canton, Ohio 44706

12.14.3 For any other formal notice under this Agreement, including a notice of termination and a notice to initiate mediation or arbitration, the notice shall be directed to the following:

Exhibit 10.4

For Licensor: For Licensee:

The Timken Company TimkenSteel Corporation

Senior VP and General Counsel Executive VP and General Counsel

Mail Code WHQ-01 Mail Code GNE-15

4500 Mt. Pleasant Street NW 1835 Dueber Avenue SW

North Canton, Ohio 44720 Canton, Ohio 44706

Exhibit 10.4

IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed this Agreement.




THE TIMKEN COMPANY By: /s/ Philip D. Fracassa____________ Name: Philip D. Fracassa Title: Chief Financial Officer		TIMKENSTEEL CORPORATION By: /s/ Christopher J. Holding_________ Name: Christopher J. Holding Title: Executive Vice President and Chief Financial Officer

[Signature Page to Trademark License Agreement]

Exhibit 10.4

SCHEDULE A

LICENSED MARKS

TimkenSteel Mark

Word Mark: TimkenSteel

Design Marks:

Foreign Language Transliterations and Foreign Character Equivalents:

铁姆肯钢材 (TimkenSteel in Chinese characters, version 1 – TieMuKenGangCai)

铁姆肯钢铁 (TimkenSteel in Chinese characters, version 2 – TieMuKenGangTie)

Timken Mark

Word Mark: Timken

Foreign Language Transliterations and Foreign Character Equivalents:

铁姆肯 (Timken in Chinese characters – TieMuKen)

(Timken in Japanese – Katakana characters)

(Timken in Korean)

(Timken in Arabic/Persian)

(Timken in Cyrillic)

Exhibit 10.4

SCHEDULE B

LOGO LOCKUPS

Logo Lockup Version 1 (Vertical Version):

Logo Lockup Version 2 (Horizontal Version):

Exhibit 10.4

SCHEDULE C

STEEL FIELDS OF USE

“Steel Fields of Use” means the following products and services:

“Materials” – Alloy steel (including, without limitation, special bar quality steel, carbon steel, micro alloy steel, high alloy and stainless steel), in ingots, blooms, billets, bars and tubes, which may be heat treated, bored or cold finished.

“Semi-finished Components” – Semi-finished components made from Materials (whether the Materials are of Licensee or third party manufacture). “Semi-finished” means a state of manufacture in which substantive additional manufacturing operations are required to transform the component into a finished component ready for assembly and ultimate use in its intended end application. Examples of components that Licensee currently supplies or contemplates supplying in the future in Semi-finished state include: forgings, cylinders, drilling rods, raised bore drill rods, drill collar blanks, flow ports, swivel joints, stator tubes, blast hole drill pipe, liner hangers, collars, adaptors, tool joints, bushings, whipstock, down-the-hole hammers, constant velocity joints, collars, pins, gears, cylinder liners, green rings, cv joint cages, shafts, axles, clutch races, gun barrels, mortar barrels, bomb bodies, motor housings, and cold drawn products.

Finished Components – The following finished components made from Materials (whether the Materials are of Licensee or third party manufacture):


•	clutch races


•	bushings


•	pins


•	collars


•	hydraulic cylinders


•	raised bore drill rods


•	blast hole drill pipe


•	down-hole and top-hole hammer components, well head components, and down-hole drilling components, but excluding the finished components within the Licensor Business.

Services – The following services performed for a fee:


•	The following value-added services performed on or with respect to Materials of third parties, including such services where the output, after such services have been performed by Licensee, is in the form of Semi-finished Components, but excluding aftermarket services (except as specifically set forth below):


◦	precision machining


◦	heat-treating, including the Advantec process and materials


◦	boring

Exhibit 10.4


◦	honing, skiving, cutting, drilling, broaching, roller burnishing, grinding, precision drilling, trepanning, turning, straightening, deburring, and milling


•	Aftermarket services performed with respect to the Finished Components described above.


•	The following metallurgical services performed on or with respect to Materials of third parties:


o	steel failure analysis


o	metallurgical testing


o	experimental steel heats


o	clean steel modeling


o	steel life testing and modeling for gears


o	steel life testing for bearings


•	Warehousing and inventory services exclusively for products within the Steel Fields of Use


•	Master distribution services exclusively for products within the Steel Fields of Use

For the avoidance of doubt, scrap metal and scrap metal processing services are not within the Steel Fields of Use.

Exhibit 10.4

SCHEDULE D

DOMAIN NAMES

timkensteel.com

timkensteel.com.br

timkensteel.cn

timkensteel.com.cn

timkensteel.hk

timkensteel.co.in

timkensteel.in

timkensteel.com.mx

timkensteel.mx

timkensteel.com.pl

timkensteel.pl

timkensteel.com.sg

timkensteel.sg

timkensteel.co.uk

Exhibit 10.4

SCHEDULE E

OTHER MARKS

铁姆肯特钢 (Timken Special Steel in Chinese characters, version 1 – TieMuKenTeGang)

铁姆肯特种钢 (Timken Special Steel in Chinese characters, version 2 – TieMuKenTeZhongGang)

铁姆肯合金钢 (Timken Alloy Steel in Chinese characters – TieMuKenHeJinGang)

Exhibit 10.4

SCHEDULE F

LICENSOR BUSINESS

Licensor Business means:

(a) the design, manufacture and/or sale of finished bearings products and finished components for bearings, including tapered roller bearings, precision cylindrical and ball bearings, needle bearings, and spherical and cylindrical roller bearings;

(b) the design, manufacture and/or sale of finished products and finished components of the category marketed and sold by Timken on or before the Distribution Date for mechanical power transmission applications, including chains, couplings, augers, gear drives and gear boxes, sensors, mechanical seals, and lubrication systems;

(c) the design, manufacture and/or sale of Aerospace systems and finished products and components of the category marketed and sold by Timken on or before the Distribution Date for Aerospace systems, including transmissions, turbine engine components, gears and rotor-head assemblies and housings, airfoils (such as blades, vanes, rotors and diffusers), and nozzles;

(d) aftermarket services related to the systems, products and components described in clauses (a), (b) and (c) above marketed and sold by Timken on or before the Distribution Date, including bearing repair, gear drive and gearbox repair, motor rewind/repair, transmission and engine overhaul, as well as component reconditioning and supply of replacement parts and accessory systems; and

(e) the design, manufacture and/or sale of pumps and motors, other than mud motors.

For avoidance of doubt, the aftermarket services above do not include the aftermarket services defined on Schedule C.

Exhibit 10.5

NONCOMPETITION AGREEMENT

BETWEEN

THE TIMKEN COMPANY

AND

TIMKENSTEEL CORPORATION

Dated June 30, 2014

TABLE OF CONTENTS


ARTICLE I	DEFINITIONS 2


1.1	Certain Definitions 2


ARTICLE II	TIMKEN NONCOMPETITION COVENANTS 5


2.1	Restriction 6


2.3	Timken Exception for Acquisition 6


2.4	Timken Nonsolicitation 6


ARTICLE III	TIMKENSTEEL NONCOMPETITION COVENANTS 6


3.1	Restrictions 6


3.2	TimkenSteel Exceptions for Stock Ownership 6


3.3	TimkenSteel Exception for Acquisition 6


3.4	TimkenSteel Nonsolicitation 7


ARTICLE IV	TERM 7


4.1	Term 7


ARTICLE V	DISPUTE RESOLUTION 7


5.1	Dispute Process 7


5.2	Informal Dispute Resolution 8


5.3	Arbitration 9


5.4	Interim Relief 10


5.5	Remedies; Failure of a Party to Comply with Dispute Resolution Process 10


5.6	Expenses 10


5.7	Continuation of Services and Commitments 10


ARTICLE VI	MISCELLANEOUS 10


6.1	Termination 10


6.2	Immediate Right of Termination 10


6.3	Amendment and Modification 10


6.4	Waiver 10


6.5	Notices 11


6.6	Entire Agreement 11


6.7	Execution and Delivery 12


6.8	No Third-Party Beneficiaries 12


6.9	Governing Law 12


6.10	Assignment 12


6.11	Severability 12


6.12	Modifications 12


6.13	Rules of Construction 12


6.14	Counterparts 13

Exhibit 10.5

NONCOMPETITION AGREEMENT

This NONCOMPETITION AGREEMENT (this “Agreement”), dated as of June 30, 2014 (the “Effective Date”), is between The Timken Company, an Ohio corporation, and TimkenSteel Corporation, an Ohio corporation.

RECITALS

A.Pursuant to the Separation and Distribution Agreement (the “Separation Agreement”) dated as of June 30, 2014, Timken has agreed to distribute to its stockholders all of the outstanding common shares of TimkenSteel owned by Timken (the “Distribution”).

B.Before the Distribution, Timken and TimkenSteel operated as an integrated company for almost 100 years. As a manufacturer of highly engineered bearings, Timken has relied upon having a reliable source of high quality steel. Beginning in 1917, Timken opened its first steelmaking plant not only to ensure a supply of high quality steel, but also to develop metallurgy and steelmaking technology. In September 2013, Timken’s Board of Directors decided to divide the two aspects of Timken’s business into two separate operating companies so that each stand-alone company can focus on its own distinct growth strategy within its respective core market.

C.Following the Distribution, Timken will continue to conduct the Bearings Business (as defined in the Separation Agreement) and TimkenSteel will continue to conduct the Steel Business (as defined in the Separation Agreement).

D.In connection with the Distribution, Timken has transferred certain assets to TimkenSteel, which may, because of the nature of the assets, contain proprietary information and/or trade secrets still owned by Timken.

E.TimkenSteel’s employees were formerly employees of Timken and, because of the synergies and interactions between the two aspects of Timken’s business before the Distribution, maintain in their minds and memories proprietary information and trade secrets owned by Timken.

F.Employees remaining with Timken, because of the synergies and interactions between the two aspects of Timken’s business before the Distribution, maintain in their minds and memories proprietary information and trade secrets now owned by TimkenSteel.

G.In connection with the Distribution, the Parties have entered into that certain Technology Cross License Agreement of even date herewith, pursuant to which, each Party has licensed the other to use certain intellectual property owned by the other.

H.The Parties have entered into that certain Research and Development Collaboration Agreement of even date herewith, pursuant to which the Parties will collaborate and work together to develop products and processes related to steel

Exhibit 10.5

grades and steel processing useful in the manufacture of products in the Timken Business and the Parties will have access to each other’s relevant intellectual property for that purpose.

I.The Parties have entered into that certain Trademark License Agreement of even date herewith that permits TimkenSteel to continue to use “TIMKEN” in the Steel Business under the terms set forth therein in order to avoid trade and consumer confusion.

J.The Parties have entered into that certain Supply Agreement of even date herewith under which TimkenSteel will continue to supply and Timken will continue to purchase highly-engineered steels for use in the manufacture of products included in the Timken Business.

K.In connection with the Distribution and in furtherance of the aims of each of the agreements described above, to permit Timken and TimkenSteel each to tailor their respective business strategies to best address market opportunities in their respective industries and to permit the shareholders of Timken and TimkenSteel to enjoy the anticipated benefits of the separation of Timken into two separate entities and maintain each Party’s value and goodwill, it is necessary for each Party to temporarily limit its activities in the other Party’s business as set forth herein.

In consideration of the foregoing and the mutual covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
DEFINITIONS

1.1 Certain Definitions. The following terms, as used herein, have the following meanings:

“Agreement” has the meaning set forth in the Preamble.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by Law to close.

“Compete” or “Competing” means (a) to conduct or participate or engage in, or bid for or otherwise pursue, a business, whether as a principal, partner, joint venturer, or owner of any debt or equity interest in any Person or business that conducts, participates or engages in, or bids for or otherwise pursues, a business or (b) to directly solicit customers in combination with or on behalf of any Person or business that conducts, participates or engages in, or bids for or otherwise pursues, a business. For avoidance of doubt, “Compete” or “Competing” does not include: (i) designing or manufacturing components or services for the designing or manufacturing Party’s internal use; or (ii) designing or manufacturing components or services that are fully consumed by the designing or manufacturing Party in its manufacturing process(es), or

Exhibit 10.5

transformed or incorporated into goods or services that said Party is not otherwise restricted from designing, manufacturing or selling under this Agreement.

“Dispute” has the meaning set forth in Section 5.1(a).

“Dispute Notice” has the meaning set forth in Section 5.2.

“Distribution” has the meaning set forth in the Recitals.

“Distribution Date” has the meaning set forth in the Separation Agreement.

“Finished Components” means the following finished components made from Materials (whether the Materials are of TimkenSteel or third party manufacture): hydraulic cylinders, raised bore drill rods and blast hole drill pipes.

“Governance Committee” has the meaning set forth in Section 5.1(b).

“JAMS” means Judicial Arbitration and Mediation Services, Inc.

“Law” means any statute, law, ordinance, regulation, rule, code or other requirement of a Governmental Authority or any order, writ, judgment, injunction, decree or award entered by or with any Governmental Authority.

“Materials” means alloy steel (including, without limitation, special bar quality steel, carbon steel, micro alloy steel, high alloy and stainless steel), in ingots, blooms, billets, bars and tubes, which may be heat treated, bored or cold finished.

“Mediation Period” has the meaning set forth in Section 5.2(e).

“Party” and “Parties” mean Timken and TimkenSteel individually or collectively.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

“Semi-finished Components” means Semi-finished components made from Materials (whether the Materials are of TimkenSteel or third party manufacture). “Semi-finished” means a state of manufacture in which substantive additional manufacturing operations are required to transform the component into a finished component ready for assembly and ultimate use in its intended end application. Examples of components that TimkenSteel currently supplies or contemplates supplying in the future in Semi-finished state include: forgings, cylinders, drilling rods, raised bore drill rods, drill collar blanks, flow ports, swivel joints, stator tubes, blast hole drill pipe, liner hangers, collars, adaptors, tool joints, bushings, whipstock, down-the-hole hammers, constant velocity

Exhibit 10.5

joints, pins, loose gears, cylinder liners, green rings, cv joint cages, shafts, axles, clutch races, gun barrels, mortar barrels, bomb bodies, motor housings, and cold drawn products.

“Separation Agreement” has the meaning set forth in the Recitals.

“Steel Services” means the following services performed for a fee:

(a) The following value-added services performed on or with respect to Materials of third parties, including such services where the output, after such services have been performed by TimkenSteel, is in the form of Semi-finished Components, but excluding aftermarket services:

precision machining

heat-treating, including the Advantec process and materials

boring

honing, skiving, cutting, drilling, broaching, roller burnishing, grinding, precision drilling, trepanning, turning, straightening, deburring, and milling

(b) The following metallurgical services performed on or with respect to Materials of third parties:

steel failure analysis

metallurgical testing

experimental steel heats

clean steel modeling

steel life testing and modeling for gears

steel life testing for bearings

(d) Master distribution services exclusively for products within the TimkenSteel Business

For the avoidance of doubt, scrap metal and scrap metal processing services are not within the Steel Services.

Exhibit 10.5

first Person otherwise has the power to direct the management and policies. A Subsidiary may be owned directly or indirectly by such first Person or by another Subsidiary of such first Person.

“Term” has the meaning set forth in Section 4.1.

“Timken” means The Timken Company and its direct and indirect Subsidiaries, other than TimkenSteel.

“Timken Business” means:

(e) the design, manufacture and/or sale of pumps and motors, other than mud motors.

“TimkenSteel” means TimkenSteel Corporation and its direct and indirect Subsidiaries.

“TimkenSteel Business” means: (i) the design, manufacture and/or sale of (a) Materials, (b) Semi-finished Components marketed and sold by TimkenSteel as of the Distribution Date and (c) Finished Components; and (ii) supply of Steel Services sold by TimkenSteel as of the Distribution Date.

ARTICLE II
TIMKEN NONCOMPETITION COVENANTS

Exhibit 10.5

2.1 Restrictions. During the Term and subject to the exclusions, exceptions and limitations expressly set forth in this Agreement, Timken will not Compete, directly or indirectly, in the TimkenSteel Business anywhere in the world. For the avoidance of doubt, Timken shall not be restricted from Competing with respect to: (i) any Semi-finished Components used in or related in any manner to the Timken Business or (ii) any Steel Services used in or related in any manner to the Timken Business.

2.2 Timken Exception for Stock Ownership. Notwithstanding Section 2.1, nothing in this Agreement will restrict Timken from owning less than 5% of the outstanding stock of any publicly traded corporation.

2.3 Timken Exception for Acquisition. Notwithstanding Section 2.1, nothing in this Agreement will restrict Timken from acquiring an entity, a portion of which competes with TimkenSteel in the TimkenSteel Business provided that (a) the portion of the acquired entity that competes with TimkenSteel in the TimkenSteel Business represents no more than (i) 10% of the acquired entity or (ii) total sales of $25 million or (b) Timken divests the portion of the acquired entity which competes with TimkenSteel in the TimkenSteel Business within 180 days of the acquisition.

2.4 Timken Nonsolicitation. During the Term, Timken will not, directly or indirectly, on its own behalf or in conjunction with any person or legal entity, recruit, solicit, or induce, or attempt to recruit, solicit or induce, any non-clerical employee of TimkenSteel to terminate his or her employment relationship with TimkenSteel. The foregoing restriction does not include the placement of general advertisements for employment with Timken in the same types of print or electronic publications used by Timken to advertise for employment prior to the Effective Date and consistent with Timken practice prior to the Effective Date. Timken will advise any third parties recruiting on Timken’s behalf of the obligation set forth in this Section 2.4 and will direct those third parties to comply with that obligation.

ARTICLE III
TIMKENSTEEL NONCOMPETITION COVENANTS

3.1 Restrictions. During the Term and subject to the exclusions, exceptions and limitations expressly set forth in this Agreement, TimkenSteel will not Compete, directly or indirectly, in the Timken Business anywhere in the world. For the avoidance of doubt, TimkenSteel shall not be restricted from Competing with respect to the supply of:

(a) the following finished components: (i) Finished Components, (ii) clutch races, (iii) bushings, (iv) pins, (v) collars, and (vi) finished loose gears (except finished loose gears for Aerospace systems as described in clause (c) of the definition of Timken Business);

(b) finished components (except to the extent included in the Timken Business) within the following applications: (i) top-hole and down-hole hammers, (ii) well heads and (iii) down-hole drill strings; and

Exhibit 10.5

3.2 TimkenSteel Exceptions for Stock Ownership. Notwithstanding Section 3.1, nothing in this Agreement will restrict TimkenSteel from owning less than 5% of the outstanding stock of any publicly traded corporation.

3.3 TimkenSteel Exception for Acquisition. Notwithstanding Section 3.1, nothing in this Agreement will restrict TimkenSteel from acquiring an entity, a portion of which competes with Timken in the Timken Business provided that (a) the portion of the acquired entity that competes with Timken in the Timken Business represents no more than (i) 10% of the acquired entity or (ii) total sales of $25 million or (b) TimkenSteel divests the portion of the acquired entity which competes with Timken in the Timken Business within 180 days of the acquisition.

3.4 TimkenSteel Nonsolicitation. During the Term, TimkenSteel will not, directly or indirectly, on its own behalf or in conjunction with any person or legal entity, recruit, solicit, or induce, or attempt to recruit, solicit or induce, any non-clerical employee of Timken to terminate their employment relationship with Timken. The foregoing restriction does not include the placement of general advertisements for employment with TimkenSteel in the same types of print or electronic publications used by Timken to advertise for employment prior to the Effective Date and consistent with Timken practice prior to the Effective Date. TimkenSteel will advise any third parties recruiting on TimkenSteel’s behalf of the obligation set forth in this Section 3.4 and will direct those third parties to comply with that obligation.

ARTICLE IV
TERM

4.1 Term. Subject to the provisions of Section 5.1, the term of this Agreement (the ”Term”) will commence on the Effective Date and end on the fifth anniversary of the Effective Date. The Parties agree said Term is reasonable and appropriate based upon, inter alia, the proprietary information, trade secrets and intellectual property shared by the Parties and consideration contributed by each Party with respect to the separation of TimkenSteel from Timken and forming the bases of the various agreements described in the Recitals. If, however, a court of competent jurisdiction in a country shall find that such period is not permissible with respect to that jurisdiction or country, then in such case, this Agreement will terminate, with respect to such jurisdiction or country only, at the end of the maximum period of time permissible under applicable Law, but shall remain in full force and effect in all other jurisdictions.

ARTICLE V
DISPUTE RESOLUTION

5.1 Dispute Process.

(a) The Parties will use commercially reasonable efforts to resolve expeditiously and on a mutually acceptable negotiated basis any dispute or

Exhibit 10.5

disagreement between the Parties arising out of or relating to this Agreement (a “Dispute”) exclusively as follows: (i) first, by engaging in an informal dispute resolution process with the possibility of mediation as provided in Section 5.2; and (ii) then, if negotiation and mediation fail, by referring the Dispute to binding arbitration as provided in Section 5.3. Each Party agrees that the procedures set forth in this ARTICLE V will be the exclusive means for resolution of any Dispute. The initiation of informal dispute resolution or arbitration hereunder will toll the applicable statute of limitations for the duration of any such proceedings.

(b) Within three business days of receipt of a Dispute Notice by either Party pursuant to Section 5.2(a), TimkenSteel and Timken will form a steering committee (the “Governance Committee”), which will be comprised of four members, two of whom will be appointed by TimkenSteel and two of whom will be appointed by Timken. The Parties will use commercially reasonable efforts to cause their respective members of the Governance Committee to make a good faith effort to promptly resolve all Disputes referred to the Governance Committee pursuant to Section 5.2.

5.2 Informal Dispute Resolution.

(a) The Dispute resolution process will begin with a written notice from one Party to the other (a “Dispute Notice”), (i) reasonably describing the nature of the Dispute and the outcome desired by the notifying Party and (ii) requesting the formation of the Governance Committee and referral of the Dispute to the Governance Committee for good faith negotiations and resolution.

(b) Following referral of the matter to the Governance Committee, the Parties will cause the Governance Committee to meet as often as the Parties reasonably deem necessary in order to gather and furnish to the other all Information with respect to the Dispute which the Parties believe to be appropriate and germane in connection with the resolution of the Dispute.

(c) During the course of the negotiation, subject to the Parties’ respective confidentiality obligations, all reasonable requests made by either Party to the other for Information will be honored in order that the members of the Governance Committee may be fully advised in the matter. The specific format for the Governance Committee’s discussions and negotiations will be left to the discretion of the Governance Committee but may include the preparation of agreed upon statements of fact or written statements of position furnished to the other Party.

(d) If the Governance Committee does not agree to a resolution of a Dispute within 30 days following the receipt of the Dispute Notice given under Section 5.2(a), or if a resolution agreed to by the Governance Committee fails to resolve the Dispute, a Party may by formal notice pursuant to Section 6.5 refer the Dispute for resolution by the Chief Executive Officer (“CEO”) of each Party, each of whom will have the authority to resolve the Dispute on behalf of their respective Party. The Parties’ CEOs will promptly meet in person or by phone to attempt to resolve the Dispute in good faith.

Exhibit 10.5

(e) If the Dispute has not been resolved by the Parties’ CEOs within 30 days following delivery of the formal notice given under Section 5.2(d), either Party may submit the Dispute for resolution by mediation. The mediation will be conducted in Canton, Ohio by a single mediator from JAMS. The Parties will mutually select the mediator from the JAMS neutral panelists list. If the Parties do not agree on the selection of the mediator within 30 days following receipt by the Parties of the list of panelists, the mediator will be selected from the list of neutral panelists pursuant to the rules for selection of arbitrators in the JAMS Comprehensive Arbitration Rules and Procedures. The mediator will have 30 days from the date the Dispute is submitted to him or her (or such longer period as the Parties may mutually agree in writing) (the “Mediation Period”) to attempt to resolve the dispute, and the Parties will cooperate fully in the mediation process. The Parties will share equally the costs, fees and expenses of the mediator and any payments to JAMS for such mediation. If the Dispute has not been resolved through mediation within the Mediation Period, each Party may refer the dispute to arbitration in accordance with Section 5.3.

(f) Except as otherwise independently discoverable, nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences or discussions to settle a Dispute pursuant to this Section 5.2 will be offered or received as evidence or used for impeachment or for any other purpose in any proceedings, including the arbitration proceedings contemplated in Section 5.3, but will be considered to have been disclosed for settlement purposes only.

5.3 Arbitration.

(a) If the mediation contemplated by Section 5.2(e) does not resolve the Dispute, and a Party wishes to pursue its rights relating to such Dispute, then, except as provided in and subject to Section 5.4, such Dispute will be submitted to final and binding arbitration as provided in this Section 5.3. Any Dispute concerning the propriety of the commencement of the arbitration will be finally settled by such arbitration.

(b) The arbitration will be held in Canton, Ohio in accordance with the JAMS Comprehensive Arbitration Rules and Procedures. The arbitration will be conducted by a single arbitrator selected by mutual agreement of the Parties. If the Parties do not agree on the selection of the arbitrator within 30 days following receipt by the Parties of the list of panelists, the arbitrator will be selected from the JAMS list of neutral panelists (exclusive of the mediator), pursuant to the JAMS Comprehensive Arbitration Rules and Procedures.

(c) The decision of the arbitrator with respect to the Dispute will be final and non-appealable (other than for fraud) and may be enforced in any court of competent jurisdiction.

(d) The use of any mediation or other “alternative dispute resolution” procedures will not be construed under the doctrine of laches, waiver or estoppel to adversely affect the rights of any party to the Dispute.

Exhibit 10.5

(e) Discovery shall be allowed only pursuant to Rule 17 of the JAMS Comprehensive Arbitration Rules and Procedures.

(f) The Parties will share equally the costs and expenses of the arbitrator, but each Party shall bear its own costs and expenses associated with participating in the arbitration, including its attorneys’ and experts’ fees, unless the arbitrator decides that one Party should be responsible for all costs and expenses, including the reasonable attorneys’ fees and experts’ fees of the other Party.

5.4 Interim Relief. Notwithstanding any other provision of ARTICLE V, at any time during the resolution of a Dispute between the Parties, either Party may request a court of competent jurisdiction to grant provisional interim relief, including pre‑arbitration attachments or injunctions, solely (a) for the purpose of preventing or minimizing irreparable harm for which money damages would not provide adequate relief, or (b) in matters involving the disclosure of such Party’s Confidential Information. A delay in seeking injunctive relief attributable to following the procedures of this ARTICLE V or otherwise seeking to amicably resolve the Dispute with the other Party will not serve as a basis to deny injunctive relief.

5.5 Remedies; Failure of a Party to Comply with Dispute Resolution Process. The arbitrators will have no authority or power to limit, expand, alter, amend, modify, revoke or suspend any condition or provision of this Agreement nor any right or power to award punitive, exemplary or treble (or other multiple) damages. If either Party does not act in accordance with this ARTICLE V, then the other Party may seek all remedies available at law or in equity to enforce this ARTICLE V.

5.6 Expenses. Except as otherwise provided in this ARTICLE V, each Party will bear its own costs, expenses and attorneys’ fees in pursuit and resolution of any Dispute.

5.7 Continuation of Services and Commitments. Unless otherwise agreed in writing, the Parties will continue to honor all commitments under this Agreement during the course of the dispute resolution pursuant to this ARTICLE V.

ARTICLE VI
MISCELLANEOUS

6.1 Termination. This Agreement may be terminated by the board of directors of Timken, in its sole and absolute discretion, at any time prior to the Distribution Date. In the event of any termination of this Agreement prior to the Distribution Date, no Party (or any of their respective directors or officers) will have any liability or further obligation to any other Party with respect to this Agreement.

6.2 Immediate Right of Termination. A Party will have the right to terminate this Agreement immediately by giving written notice to the second Party in the event that: (a) the second Party files a petition in bankruptcy or is adjudicated to be bankrupt or insolvent, or makes an assignment for the benefit of creditors or an arrangement

Exhibit 10.5

pursuant to any bankruptcy law; or (b) if the second Party discontinues or dissolves its business or if a receiver is appointed for the second Party or for the second Party’s business and such receiver is not discharged within ninety (90) days.

6.3 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing expressly designated as an amendment hereto and signed by both Parties.

6.4 Waiver. No failure or delay of any Party in exercising any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any Party to any such waiver will be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.The rights and remedies of the Parties under this Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise have under Law.

6.5 Notices. All notices and other communications hereunder will be in writing and will be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder will be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to Timken:

The Timken Company

4500 Mount Pleasant Street NW

North Canton, Ohio 44720-5450

Attention: Senior Vice President and General Counsel

Facsimile: (234) 262 4249

if to TimkenSteel:

TimkenSteel Corporation
1835 Dueber Avenue, S.W.

Canton, Ohio 44706-2798

Attention: Executive Vice President and General Counsel

Facsimile: (330) 471-4041

6.6 Entire Agreement. This Agreement constitutes the entire agreement between the parties, and supersedes all prior written agreements, arrangements,

Exhibit 10.5

communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Parties with respect to the subject matter of this Agreement. This Agreement will not be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby other than those expressly set forth in this Agreement or in any document required to be delivered hereunder. Except as expressly stated in this Agreement, there are no agreements or understandings between Timken and TimkenSteel limiting in any way the extent to which or the means by which each might choose to compete with the other.

6.7 Execution and Delivery. Notwithstanding any oral agreement or course of action of the Parties or their representatives to the contrary, no Party to this Agreement is under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement is executed and delivered by each of the Parties.

6.8 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or will confer upon any Person other than the Parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under, or by reason of, this Agreement.

6.9 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby will be governed by, and construed in accordance with, the Laws of the State of Ohio, without regard to the conflicts of law rules thereof.

6.10 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party, and any such assignment or delegation without such prior written consent will be null and void. If either Party to this Agreement (or any of its successors or permitted assigns) (a) consolidates with or merges into any other Person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (b) transfers all or substantially all of its property and/or assets to any Person, then, and in each such case, the Party (or its successors or permitted assigns, as applicable) will ensure that such Person assumes all of the obligations of such Party (or its successors or permitted assigns, as applicable) under this Agreement, in which case the consent described in the previous sentence will not be required.

6.11 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such

Exhibit 10.5

invalid, illegal or unenforceable provision or portion of any provision had never been contained in this Agreement.

6.12 Modifications. If any Governmental Authority determines that this Agreement, or any part hereof, is unenforceable, it is the intention of the Parties that such Governmental Authority have the power to modify this Agreement to the extent necessary to render it fully enforceable and that, as so modified, it will be enforced.

6.13 Rules of Construction. Interpretation of this Agreement will be governed by the following rules of construction: (a) words in the singular will be held to include the plural and vice versa, (b) references to the terms Article, Section, and paragraph, are references to the Articles, Sections, and paragraphs of this Agreement unless otherwise specified, (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement, (d) the word “including” and words of similar import when used in this Agreement will mean “including without limitation,” unless otherwise specified, (e) the word “or” will not be exclusive, (f) references to “written” or “in writing” include in electronic form, (g) the word “will” will be construed to have the same meaning and effect as the word “shall”, (h) provisions will apply, when appropriate, to successive events and transactions, (i) the table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement, (j) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement, and (k) a reference to any Person includes such Person’s successors and permitted assigns.

6.14 Counterparts. This Agreement may be executed in one or more counterparts, and by each Party in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) will be as effective as delivery of a manually executed counterpart of any such Agreement.

[Signatures on Following Page]

Exhibit 10.5

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

THE TIMKEN COMPANY

By: /s/ Philip D. Fracassa____________

Name: Philip D. Fracassa

Title: Chief Financial Officer

TIMKENSTEEL CORPORATION

By: /s/ Christopher J. Holding_________

Name: Christopher J. Holding

Title: Executive Vice President and
Chief Financial Officer

[Signature page to Noncompetition Agreement]

Exhibit 99.1

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

On June 30, 2014, The Timken Company and its subsidiaries ("Timken" or the "Company"), completed the spinoff of its steel business, creating a new independent publicly traded steel company, TimkenSteel Corporation ("TimkenSteel"). At the close of business on June 30, 2014, Timken shareholders of record as of the close of business on June 23, 2014 received one common share of TimkenSteel Corporation for every two common shares of Timken they held.

The following unaudited condensed pro forma consolidated financial information is based upon the historical financial statements of the Company, adjusted to reflect the spinoff of TimkenSteel. The following unaudited condensed pro forma consolidated financial statements of the Company should be read in conjunction with the related notes and with the historical consolidated financial statements of the Company and the related notes included in previous filings with the Securities and Exchange Commission. The unaudited condensed pro forma consolidated balance sheet reflects the spinoff of TimkenSteel as if it had occurred on March 31, 2014, while the unaudited condensed pro forma statements of consolidated income for the periods ended March 31, 2014, December 31, 2013, December 31, 2012 and December 31, 2011, respectively, give effect to the spinoff of TimkenSteel as if it had occurred on January 1, 2011. The pro forma adjustments, described in the related notes, are based on the best available information and certain assumptions that the Company's management believes to be reasonable.

The unaudited condensed pro forma consolidated financial statements are provided for illustrative purposes only and are not necessarily indicative of operating results or financial position that would have occurred had the spinoff of TimkenSteel occurred on the dates indicated for the unaudited condensed pro forma consolidated balance sheet or for each period presented for the unaudited condensed pro forma statements of consolidated income.

Exhibit 99.1



Condensed Pro Forma Statement of Consolidated Income
For the period ended March 31, 2014
(unaudited)


(Dollars in millions, except per share data)	As reported			Distribution of TimkenSteel (a)			Pro Forma

Net Sales	$	1,104.5		$	(367.7	)	$	736.8
Cost of products sold	813.5			(294.8		)	518.7
Gross Profit	291.0			(72.9		)	218.1
Selling, general and administrative expenses	162.0			(20.2		)	141.8
Impairment and restructuring charges	3.9			—			3.9
Separation costs	11.5			(11.5		)	—
Operating Income	113.6			(41.2		)	72.4
Interest expense	(5.5		)	—			(5.5		)
Interest income	1.0			—			1.0
Gain on sale of real estate	22.6			—			22.6
Other income (expense), net	(0.6		)	(1.6		)	(2.2		)
Income Before Income Taxes	131.1			(42.8		)	88.3
Provision for income taxes	47.3			(19.3		)	28.0
Net Income	83.8			(23.5		)	60.3
Less: Net income attributable to noncontrolling interest	0.3			—			0.3
Net Income Attributable to the Timken Company	$	83.5		$	(23.5	)	$	60.0

Net Income per Common Share Attributable to the Timken Company Common Shareholders
Basic earnings per share	$	0.90		$	(0.25	)	$	0.65
Diluted earnings per share	$	0.90		$	(0.25	)	$	0.65		(b)
Dividends per share	$	0.25		$	—		$	0.25

Exhibit 99.1



Condensed Pro Forma Statement of Consolidated Income
Year ended December 31, 2013
(unaudited)


(Dollars in millions, except per share data)	As reported			Distribution of TimkenSteel (a)			Pro Forma

Net Sales	$	4,341.2		$	(1,305.8	)	$	3,035.4
Cost of products sold	3,249.2			(1,082.2		)	2,167.0
Gross Profit	1,092.0			(223.6		)	868.4
Selling, general and administrative expenses	626.6			(79.9		)	546.7
Impairment and restructuring charges	16.4			(0.6		)	15.8
Separation costs	13.0			(13.0		)	—
Operating Income	436.0			(130.1		)	305.9
Interest expense	(24.4		)	—			(24.4		)
Interest income	1.9			—			1.9
Continued Dumping and Subsidy Offset Act (expense) receipts, net	(2.8		)	—			(2.8		)
Other income (expense), net	6.4			3.0			9.4
Income Before Income Taxes	417.1			(127.1		)	290.0
Provision for income taxes	154.1			(39.5		)	114.6
Net Income	263.0			(87.6		)	175.4
Less: Net income attributable to noncontrolling interest	0.3			—			0.3
Net Income Attributable to the Timken Company	$	262.7		$	(87.6	)	$	175.1

Net Income per Common Share Attributable to the Timken Company Common Shareholders
Basic earnings per share	$	2.76		$	(0.92	)	$	1.84
Diluted earnings per share	$	2.74		$	(0.91	)	$	1.83		(b)
Dividends per share	$	0.92		$	—		$	0.92

Exhibit 99.1



Condensed Pro Forma Statement of Consolidated Income
Year ended December 31, 2012
(unaudited)


(Dollars in millions, except per share data)	As reported			Distribution of TimkenSteel (a)			Pro Forma

Net Sales	$	4,987.0		$	(1,627.4	)	$	3,359.6
Cost of products sold	3,620.7			(1,289.1		)	2,331.6
Gross Profit	1,366.3			(338.3		)	1,028.0
Selling, general and administrative expenses	643.9			(89.4		)	554.5
Impairment and restructuring charges	29.5			—			29.5
Operating Income	692.9			(248.9		)	444.0
Interest expense	(31.1		)	—			(31.1		)
Interest income	2.9			—			2.9
Continued Dumping and Subsidy Offset Act (expense) receipts, net	108.0			—			108.0
Other income (expense), net	(6.7		)	0.7			(6.0		)
Income Before Income Taxes	766.0			(248.2		)	517.8
Provision for income taxes	270.1			(83.8		)	186.3
Net Income	495.9			(164.4		)	331.5
Less: Net income attributable to noncontrolling interest	0.4			—			0.4
Net Income Attributable to the Timken Company	$	495.5		$	(164.4	)	$	331.1

Net Income per Common Share Attributable to the Timken Company Common Shareholders
Basic earnings per share	$	5.11		$	(1.70	)	$	3.41
Diluted earnings per share	$	5.07		$	(1.68	)	$	3.39
Dividends per share	$	0.92		$	—		$	0.92

Exhibit 99.1



Condensed Pro Forma Statement of Consolidated Income
Year ended December 31, 2011
(unaudited)


(Dollars in millions, except per share data)	As reported			Distribution of TimkenSteel (a)			Pro Forma

Net Sales	$	5,170.2		$	(1,836.6	)	$	3,333.6
Cost of products sold	3,800.5			(1,485.0		)	2,315.5
Gross Profit	1,369.7			(351.6		)	1,018.1
Selling, general and administrative expenses	626.2			(85.6		)	540.6
Impairment and restructuring charges	14.4			—			14.4
Operating Income	729.1			(266.0		)	463.1
Interest expense	(36.8		)	—			(36.8		)
Interest income	5.6			—			5.6
Continued Dumping and Subsidy Offset Act (expense) receipts, net	(1.1		)	0.7			(0.4		)
Income Before Income Taxes	696.8			(265.3		)	431.5
Provision for income taxes	240.2			(89.6		)	150.6
Net Income	456.6			(175.7		)	280.9
Less: Net income attributable to noncontrolling interest	2.3			—			2.3
Net Income Attributable to the Timken Company	$	454.3		$	(175.7	)	$	278.6

Net Income per Common Share Attributable to the Timken Company Common Shareholders
Basic earnings per share	$	4.65		$	(1.80	)	$	2.85
Diluted earnings per share	$	4.59		$	(1.78	)	$	2.81
Dividends per share	$	0.78		$	—		$	0.78

Exhibit 99.1



Condensed Pro Forma Consolidated Balance Sheet
March 31, 2014
(unaudited)
				Pro Forma Adjustments
(Dollars in millions)	As Reported			Distribution of TimkenSteel (a)			Other			Note	Pro Forma

ASSETS
Current Assets
Cash and cash equivalents	$	248.3		$	—		$	50.0		(c)	$	298.3
Restricted cash	15.1			—			—				15.1
Accounts receivable, net	618.2			(150.7		)	—				467.5
Inventories, net	829.7			(228.0		)	—				601.7
Deferred income taxes	69.6			(1.7		)	—				67.9
Deferred charges and prepaid expenses	29.5			(0.7		)	—				28.8
Other current assets	59.2			1.3			—				60.5
Total Current Assets	1,869.6			(379.8		)	50.0				1,539.8
Property, Plant and Equipment, Net	1,559.9			(701.0		)	(26.1		)	(d)	832.8
Other Assets
Goodwill	358.4			(12.6		)	—				345.8
Non-current pension assets	352.0			(124.2		)	—				227.8
Other intangible assets	214.0			(11.5		)	—				202.5
Deferred income taxes	10.1			(1.7		)	—				8.4
Other non-current assets	54.0			(1.3		)	—				52.7
Total Other Assets	988.5			(151.3		)	—				837.2
Total Assets	$	4,418.0		$	(1,232.1	)	$	23.9			$	3,209.8

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt	$	22.2		$	—		$	—			$	22.2
Accounts payable, trade	266.4			(108.9		)	—				157.5
Salaries, wages and benefits	163.2			(52.6		)	—				110.6
Income taxes payable	123.4			(0.5		)	—				122.9
Deferred income taxes	7.8			—			—				7.8
Other current liabilities	148.5			(16.5		)	—				132.0
Current portion of long-term debt	250.7			—			—				250.7
Total Current Liabilities	982.2			(178.5		)	—				803.7
Non-Current Liabilities
Long-term debt	206.4			(30.2		)	—				176.2
Accrued pension cost	167.9			(19.9		)	—				148.0
Accrued postretirement benefits cost	226.9			(92.0		)	—				134.9
Deferred income taxes	166.6			(86.1		)	(2.2		)	(e)	78.3
Other non-current liabilities	53.6			(6.5		)	—				47.1
Total Non-Current Liabilities	821.4			(234.7		)	(2.2		)		584.5
Shareholders' Equity
Common Stock	952.1			—			—				952.1
Earnings invested in the business	2,646.8			(1,066.0		)	26.1			(f)	1,606.9
Accumulated other comprehensive loss	(614.0		)	247.1			—				(366.9		)
Treasury shares at cost	(383.3		)	—			—				(383.3		)
Total Shareholders' Equity	2,601.6			(818.9		)	26.1				1,808.8
Noncontrolling interest	12.8			—							12.8
Total Equity	2,614.4			(818.9		)	26.1				1,821.6
Total Liabilities and Equity	$	4,418.0		$	(1,232.1	)	$	23.9			$	3,209.8

Exhibit 99.1

THE TIMKEN COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Reflects the operations, assets, liabilities and equity of TimkenSteel. Selling, general and administrative expenses includes an estimate of historical costs of employees that transferred from corporate functions to the steel business as part of the spinoff of TimkenSteel. It excludes certain general corporate overhead expenses that were allocated to TimkenSteel in its historical financial statements that do not specifically relate to TimkenSteel. Such general corporate expenses do not meet requirements to be presented in discontinued operations and thus will be presented as part of the Company's continuing operations. Separation costs for the periods ended March 31, 2014 and December 31, 2013 include one-time transaction costs directly related to the spinoff of TimkenSteel. These costs primarily include accounting, legal, consulting and advisory fees.

Pension assets, liabilities and related other comprehensive income, as well as accrued other postretirement benefit cost liabilities and related other comprehensive income, reflect the historical amounts that were included in the balance sheet at March 31, 2014 related to TimkenSteel.


b.	The following table compares net income attributable to Timken, as reported, and diluted earnings per share, as reported, to Pro Forma Net Income attributable to Timken and Pro Forma diluted earnings per share for the quarter ended March 31, 2014 and the year ended December 31, 2013.



	Three Months Ended March 31, 2014			Diluted Earnings Per Share			Year Ended Dec. 31, 2013			Diluted Earnings Per Share

Net income attributable to The Timken Company	$	83.5		$	0.90		$	262.7		$	2.74

Less: net income related to TimkenSteel	(35.0		)	(0.38		)	(97.9		)	(1.02		)

	48.5			0.52			164.8			1.72

Add: separation costs, net of taxes	11.5			0.13			10.3			0.11

Pro forma net income attributable to The Timken Company	$	60.0		$	0.65		$	175.1		$	1.83


c.	Reflects the net cash distribution immediately prior to the spinoff by TimkenSteel to the Company, pursuant to the terms of the Separation and Distribution Agreement, of $50 million, representing the dividend paid by TimkenSteel to the Company from the net proceeds of its borrowings.


d.	Reflects approximately $26 million of property, plant and equipment, net, related to TimkenSteel's assumption of the Company's former headquarters in Canton, Ohio and computer software.


e.	Reflects the deferred taxes on TimkenSteel's assumption of the Company's former headquarters in Canton, Ohio.


f.	Total equity was adjusted as a result of adjustments (c), (d) and (e) above.

Grafico Azioni Timken (NYSE:TKR)
Storico
Da Giu 2024 a Lug 2024

Grafico Azioni Timken (NYSE:TKR)
Storico
Da Lug 2023 a Lug 2024

TKR Timken Co

Notizie Timken Co - TKR

La tua Cronologia

Più Attivi

Toplist

TKR Timken Co

Notizie Timken Co - TKR

La tua Cronologia