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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

THE TIMKEN COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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TABLE OF CONTENTS

PAGE

Chairman's Letter........................................................... 1

Notice of Annual Meeting.................................................... 3

Proxy Statement............................................................. 4

Election of Directors.................................................. 4

Election of Class II Directors (Item No. 1)....................... 4

Election of Class I Director (Item No. 2)......................... 5

Information Concerning Nominees and Continuing Directors.......... 5

Beneficial Stock Ownership........................................ 8

Executive Compensation............................................ 10

Approval of the Timken Company Senior Executive Management
Performance Plan (Item No. 3).......................................... 22

Auditors............................................................... 24

Submission of Shareholder Proposals.................................... 24

General................................................................ 24

Appendix A.................................................................. 25
3
TIMKEN
- --------------------------------------------------------------------------------
W.R. Timken, Jr. WORLDWIDE LEADER IN BEARINGS AND STEEL
Chairman, President and CEO

February 24, 1999

Dear Shareholder:

The 1999 Annual Meeting of The Timken Company will be held on Tuesday, April
20, 1999, at ten o'clock in the morning at the Corporate Office of the Company
in Canton, Ohio.

This year, you are being asked to act upon three matters recommended by your
Board of Directors. Details of these matters are contained in the accompanying
Notice of Annual Meeting and Proxy Statement.

Please read the enclosed information carefully before completing and returning
the enclosed proxy card. Returning your proxy card as soon as possible will
assure your representation at the meeting, whether or not you plan to attend.

I appreciate the strong support of our shareholders over the years and look
forward to a similar vote of support at the 1999 Annual Meeting.

Sincerely,

/s/ W. R. Timken, Jr.

W. R. Timken, Jr.

Enclosure

THE TIMKEN COMPANY 1835 DUEBER AVENUE, S.W.
CANTON, OHIO 44706-0927 USA TELEPHONE: (330) 438-3000
4

THE TIMKEN COMPANY
CANTON, OHIO
---------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

------------------------------------------

The Annual Meeting of Shareholders of The Timken Company will be held on
Tuesday, April 20, 1999, at 10:00 A.M., at 1835 Dueber Avenue, S.W., Canton,
Ohio, for the following purposes:

1. To elect four Directors to serve in Class II for a term of three years.

2. To elect one Director to serve in Class I for a term of two years.

3. To approve The Timken Company Senior Executive Management Performance
Plan.

4. To transact such other business as may properly come before the meeting.

Holders of Common Stock of record at the close of business on February 19, 1999,
are the shareholders entitled to notice of and to vote at the meeting.

PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD, WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING. For your convenience, a self addressed envelope is
enclosed requiring no postage if mailed in the United States.

LARRY R. BROWN
Senior Vice President and General Counsel

February 24, 1999

YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY CARD.

-3-
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THE TIMKEN COMPANY

--------------------

PROXY STATEMENT

The enclosed proxy is solicited by the Board of Directors in connection with
the Annual Meeting of Shareholders to be held April 20, 1999, for the purpose of
considering and acting upon the matters specified in the foregoing Notice. The
mailing address of the corporate offices of the Company is 1835 Dueber Avenue,
S.W., Canton, Ohio 44706-2798. The approximate date on which this Proxy
Statement and form of proxy will be first sent or given to shareholders is
February 26, 1999.

Financial and other reports will be submitted to the meeting, but it is not
intended that any action will be taken on these reports. The Board of Directors
is not aware that matters other than those specified in the foregoing Notice
will be brought before the meeting for action. However, if any such matters
should be brought before the meeting, the persons appointed as proxies may vote
or act upon such matters according to their judgment.

ELECTION OF DIRECTORS

The Company presently has eleven Directors who, pursuant to the Amended
Regulations of the Company, are divided into three classes with four Directors
in Class II and Class III, and three Directors in Class I. At the Board of
Directors' meeting held on February 5, 1999, the Board passed a resolution
increasing the number of Directors from eleven to twelve effective as of the
1999 Annual Meeting. The increase of one Director was apportioned to Class I. At
the 1999 Annual Meeting, one Director will be elected to fill the vacancy
created in Class I for a two-year term to expire at the 2001 Annual Meeting, and
four Directors will be elected to serve in Class II for a three-year term to
expire at the 2002 Annual Meeting. Under Ohio law and the Company's Amended
Regulations, candidates for Directors receiving the greatest number of votes
shall be elected.

If any nominee becomes unable, for any reason, to serve as a Director, or
should a vacancy occur before the election (which events are not anticipated),
the Directors then in office may substitute another person as a nominee or may
reduce the number of nominees to such extent as they shall deem advisable.

ITEM NO. 1
ELECTION OF CLASS II DIRECTORS

The Board of Directors, by resolution at its February 5, 1999, meeting,
nominated the four individuals set forth below to be elected Directors in Class
II at the 1999 Annual Meeting to serve for a term of three years expiring at the
Annual Meeting in 2002 (or until their respective successors are elected and
qualified). All of the nominees have been previously elected as a Director by
the shareholders. Each of the nominees listed below has consented to serve as a
Director if elected.

Unless otherwise indicated on any proxy, the persons named as proxies on the
enclosed proxy form intend to vote the shares covered by such proxy form in
favor of the nominees named below.

-4-
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The following table, based in part on information received from the
respective nominees and in part from the records of the Company, sets forth
information regarding each nominee as of January 22, 1999.

AGE; PRINCIPAL POSITION OR OFFICE; DIRECTOR
BUSINESS EXPERIENCE FOR LAST FIVE YEARS; CONTINUOUSLY
NAME OF NOMINEE DIRECTORSHIPS OF PUBLICLY HELD COMPANIES SINCE
- --------------- ---------------------------------------- -----

J. Clayburn La Force, Jr. 70, Dean Emeritus and Professor Emeritus, 1994
The John E. Anderson Graduate
School of Management, University
of California, Los Angeles.
Previous positions: Acting Dean,
Hong Kong University of Science
and Technology;
Dean, John E. Anderson Graduate School
of Management.
Director of: Rockwell International Corporation;
Jacobs Engineering Group Inc.;
The BlackRock Funds; Imperial Credit
Industries, Inc.; Motor Cargo Industries, Inc.;
Payden & Rygel Investment Trust; Provident
Investment Counsel Mutual Funds.

Robert W. Mahoney 62, Chairman of the Board and 1992
Chief Executive Officer of Diebold,
Incorporated, a company specializing in the
automation of self-service transactions,
security products, software and service for
its products.
Previous position: President and Chief
Executive Officer of Diebold, Incorporated.
Director of: Diebold, Incorporated; Sherwin-
Williams Co.

Jay A. Precourt 61, Chairman of the Board of Hermes 1996
Consolidated Inc., a gatherer, transporter and
refiner of crude oil and crude oil products.
Previous positions: Vice Chairman and Chief
Executive Officer of Tejas Gas, LLC, an
intrastate gatherer, transporter and marketer of
natural gas; Chairman of the Board of Coral
Energy L.P., a marketer of electricity and
natural gas.
Director of: Halliburton Company;
Chairman of the Board of Founders Funds, Inc.

Joseph F. Toot, Jr. 63, Retired President and Chief Executive 1968
Officer of The Timken Company.
Director of: Rockwell International
Corporation.

ITEM NO. 2
ELECTION OF CLASS I DIRECTOR

The Board of Directors by resolution at its February 5, 1999, meeting,
nominated the individual set forth below to be elected a Director in Class I at
the 1999 Annual Meeting to serve for a term of two years expiring

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at the Annual Meeting in 2001 (or until his respective successor is elected and
qualified). This nominee has not been previously elected as a Director by the
shareholders. This nominee has consented to serve as a Director if elected.

Unless otherwise indicated on any proxy, the persons named as proxies on
the enclosed proxy form intend to vote the shares covered by such proxy form in
favor of the nominee named below.

John A. Luke, Jr. 50, Chairman, President and Chief Executive ----
Officer of Westvaco Corporation, a producer
of paper, packaging, specialty chemicals and
forest products.
Previous position: President and Chief
Executive Officer of Westvaco Corporation.
Director of: The Bank of New York; Westvaco
Corporation.

CONTINUING DIRECTORS

The remaining seven Directors, named below, will continue to serve in their
respective classes until their term expires. The following table, based in part
on information received from the respective Directors and in part from the
records of the Company, sets forth information regarding each continuing
Director as of January 22, 1999.

AGE; PRINCIPAL POSITION OR OFFICE; DIRECTOR
BUSINESS EXPERIENCE FOR LAST FIVE YEARS; TERM CONTINUOUSLY
NAME OF DIRECTOR DIRECTORSHIPS OF PUBLICLY HELD COMPANIES EXPIRES SINCE
- ---------------- ---------------------------------------- ------- -----

Stanley C. Gault 73, Retired Chairman of the Board of The April, 2000 1988
Goodyear Tire and Rubber Company, a
manufacturer and distributor of tires, chemicals,
polymers, plastic film and other rubber products.
Previous positions: Chairman of the Board
and Chief Executive Officer of The
Goodyear Tire and Rubber Company;
Chairman of the Board and Chief Executive
Officer of Rubbermaid Incorporated, a
manufacturer and distributor of rubber and
plastic products for consumer and institutional
markets.
Director of: Avon Products, Inc.; Vencor, Inc.;
Wal-Mart Stores, Inc.

John M. Timken, Jr. 47, Private Investor. April, 2000 1986

W. R. Timken, Jr. 60, Chairman, President and CEO. April, 2000 1965
Previous position: Chairman - Board
of Directors.
Director of: Diebold, Incorporated;
Aeroquip-Vickers, Inc.

Ward J. Timken 56, Vice President. April, 2001 1971

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Martin D. Walker 66, Chairman and Chief Executive Officer April, 2001 1995
of M. A. Hanna Company, an international
specialty chemicals company, whose
primary businesses are plastics and rubber
compounding, color and additive concentrates
and distribution of plastic resins and
engineered shapes.
Previous position: Principal, MORWAL Investments,
a private investment firm.
Director of: Comerica Inc.; The Goodyear Tire &
Rubber Company; M. A. Hanna Company;
Lexmark International Group, Inc.; Meritor Automotive,
Inc.; The Reynolds and Reynolds Company; Textron Inc.

Charles H. West 64, Retired Executive Vice President and April, 2001 1984
President - Steel of The Timken Company.

Alton W. Whitehouse 71, Retired Chairman and Chief April, 2000 1986
Executive Officer of The Standard
Oil Company, a producer principally
of domestic oil and natural gas.
Director of: Cleveland Cliffs, Inc.

W. R. Timken, Jr. and Ward J. Timken are brothers and are cousins of John
M. Timken, Jr. The Board of Directors has an Audit Committee and a Compensation
Committee; it does not have a Nominating Committee since the Board as a whole
performs that function. Messrs. J. Clayburn La Force, Jr., Robert W. Mahoney
(Chairman), Jay A. Precourt and John M. Timken, Jr. are the members of the Audit
Committee, which generally monitors the audit of the Company's financial
statements conducted by the auditors of the Company. Messrs. Stanley C. Gault,
Martin D. Walker and Alton W. Whitehouse (Chairman) are the members of the
Compensation Committee, which establishes compensation for the Company's
Officers and determines incentive and performance awards. During 1998, there
were seven meetings of the Board of Directors, three meetings of its Audit
Committee and five meetings of its Compensation Committee. All nominees for
Director and all continuing Directors attended 75 percent or more of the
meetings of the Board and its Committees which they were eligible to attend.

Each nonemployee Director who served in 1998 was paid at the annual rate of
$25,000 for services as a Director. Each nonemployee Director serving at the
time of the Annual Meeting of Shareholders on April 21, 1998, received a grant
of 400 shares of Common Stock under The Timken Company Long-Term Incentive Plan,
as Amended and Restated, following the meeting, and such Directors and nominees
for Director will receive annual grants of Common Stock under the Plan following
the Annual Meeting of Shareholders each year as long as they serve as
nonemployee Directors. Upon election to the Board, a new nonemployee Director
receives a grant of 2,000 restricted shares under The Timken Company Long-Term
Incentive Plan, as Amended and Restated. Members of the Audit Committee and the
Compensation Committee received additional compensation at the rate of $10,000
per year for the Committee Chairmen and $5,000 per year for each regular
Committee member. Any Director may elect to defer the receipt of all or a
certain specified portion of these fees based upon an Optional Deferment of
Directors' Fees Plan. Under this Plan, amounts deferred by a Director earn
interest and are payable to the Director in a lump sum on the date previously
elected by the Director or in installment payments beginning when the Director
ceases to be a Director. Directors who are employees of the Company receive no
separate fees as Directors of the Company.

-7-
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BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table shows, as of January 22, 1999, the beneficial ownership
of Common Stock of the Company by each continuing Director and nominee for
election as a Director, by the Chairman and Chief Executive Officer (who is also
a Director) and the four other most highly compensated Executive Officers during
1998, and by all continuing Directors, nominees for Director and Officers as a
group. Beneficial ownership of Common Stock has been determined for this purpose
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 and is
based on the sole or shared power to vote or direct the voting or to dispose or
direct the disposition of Common Stock. Beneficial ownership as determined in
this manner does not necessarily bear on the economic incidents of ownership of
Common Stock.

AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP OF COMMON STOCK
-------------------------------------------------------------------------------------
SOLE VOTING SHARED VOTING PERCENT
OR INVESTMENT OR INVESTMENT AGGREGATE OF
NAME POWER POWER AMOUNT CLASS
------------------------------ ------------------- ------------------- -------------------- -------------

Bill J. Bowling 131,772 (1) 0 131,772 (1) *

Stanley C. Gault 62,400 0 62,400 *

J. Clayburn La Force, Jr. 5,937 0 5,937 *

Robert L. Leibensperger 113,409 (1) 0 113,409 (1) *

John A. Luke, Jr. 0 0 0 *

Robert W. Mahoney 4,727 0 4,727 *

Stephen A. Perry 52,130 (1) 0 52,130 (1) *

Jay A. Precourt 13,854 0 13,854 *

Thomas W. Strouble 67,290 (1) 200 67,490 (1) *

John M. Timken, Jr. 582,009 (2) 272,210 (3) 854,219 (2) (3) 1.4%

Ward J. Timken 353,077 (1) 6,981,941 (3) (4) 7,335,018 (1) (3) (4) 11.9%

W. R. Timken, Jr. 279,283 (1) 7,868,081 (3) (4) 8,147,364 (1) (3) (4) 13.2%

Joseph F. Toot, Jr. 502,066 (1) 200 502,266 (1) *

Martin D. Walker 7,653 0 7,653 *

Charles H. West 211,378 (1) 669 212,047 (1) *

Alton W. Whitehouse 10,400 0 10,400 *

All Directors, Nominees for 2,838,255 (1) 8,069,469 10,907,724 (1) 17.4%
Director and Officers as a
Group (5)

* Percent of class is less than 1%.

-8-
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(1) Includes shares which the individual or group named in the table
has the right to acquire, on or before March 23, 1999, through
the exercise of stock options pursuant to the 1985 Incentive
Plan and the Long-Term Incentive Plan, as Amended and Restated,
as follows: Bill J. Bowling - 88,450; Robert L. Leibensperger -
58,300; Stephen A. Perry - 23,000; Thomas W. Strouble - 32,000;
Ward J. Timken - 0; W. R. Timken, Jr. - 56,500; Joseph F. Toot,
Jr. - 434,000; Charles H. West - 134,800; all Directors,
Nominees and Officers as a Group - 1,050,800. Such shares have
been treated as outstanding for the purpose of calculating the
percentage of the class beneficially owned by such individual or
group, but not for the purpose of calculating the percentage of
the class owned by any other person.

(2) Includes 250,427 shares for which John M. Timken, Jr. has sole
voting and investment power as executor of the estate of Susan
H. Timken or as a trustee of a trust in connection with such
estate.

(3) Includes shares for which another individual named in the table
is also deemed to be the beneficial owner, as follows: John M.
Timken, Jr. - 259,750; Ward J. Timken - 6,797,770; W. R. Timken,
Jr. - 7,057,520.

(4) Includes 529,614 shares for which Ward J. Timken and W. R.
Timken, Jr. have joint voting and investment power as executors
of the estate of Louise B. Timken.

(5) The number of shares beneficially owned by all Directors,
nominees for Directors and Officers as a group has been
calculated to eliminate duplication of beneficial ownership.

Members of the Timken family, including Messrs. John M. Timken, Jr., Ward
J. Timken and W. R. Timken, Jr., have in the aggregate sole or shared voting
power with respect to at least an aggregate of 11,473,198 shares (18.5%) of
Common Stock, which amount includes 56,500 shares that members of the Timken
family have the right to acquire, on or before March 23, 1999, as set forth in
footnote (1) above. The members of the Timken family identified in the table are
not deemed to be the beneficial owners of all such shares. The Timken Foundation
of Canton, 236 Third Street, S.W., Canton, Ohio 44702, holds 5,247,944 of these
shares, representing 8.5% of the outstanding Common Stock. Messrs. Ward J.
Timken, W. R. Timken, Jr. and Don D. Dickes are trustees of the Foundation and
share the voting and investment power.

Participants in the Company's Savings and Investment Pension Plan have
voting power over an aggregate of 7,242,268 shares (11.7%) of Common Stock of
the Company.

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EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning 1996, 1997 and 1998
compensation for the Company's Chief Executive Officer and the four other most
highly compensated Executive Officers who were Executive Officers during 1998.
On January 1, 1998, W. R. Timken, Jr., Chairman, assumed additional
responsibilities as President and Chief Executive Officer. Robert L.
Leibensperger became Executive Vice President, Chief Operating Officer and
President - Bearings and Bill J. Bowling became Executive Vice President, Chief
Operating Officer and President - Steel.

- --------------------------------- --------- ----------------------- ------------------------------------- -----------
ANNUAL LONG TERM
COMPENSATION COMPENSATION
----------------------- -------------------------------------
AWARDS
-------------------------------------
(A) (B) (C)
RESTRICTED SECURITIES ALL OTHER
NAME AND STOCK UNDERLYING COMP
PRINCIPAL POSITION YEAR SALARY BONUS AWARD(S) OPTIONS ($)
($) ($) ($) (#)
- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------

W. R. Timken, Jr. 1998 850,000 0 187,338 100,000 66,700
Chairman, President 1997 683,333 600,000 184,236 80,000 50,569
And Chief Executive 1996 619,631 416,000 116,396 62,000 45,799
Officer
- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------
Robert L. Leibensperger 1998 500,000 0 124,363 52,000 36,524
Executive Vice 1997 415,000 294,000 95,651 50,000 29,716
President, Chief 1996 398,333 231,000 77,875 30,000 27,707
Operating Officer and
President-Bearings
- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------

Bill J. Bowling 1998 500,000 0 136,896 52,000 34,500
Executive Vice 1997 300,000 250,000 97,944 40,000 21,942
President, Chief 1996 279,500 177,000 69,959 26,000 17,572
Operating Officer and
President-Steel
- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------
Thomas W. Strouble (D) 1998 295,000 0 62,999 22,000 22,080
Sr. Vice President - 1997 280,000 185,000 47,287 22,000 19,090
Technology 1996 266,667 135,000 37,405 18,000 17,465

- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------
Stephen A. Perry (D) 1998 295,000 0 55,877 22,000 21,896
Sr. Vice President - 1997 269,167 181,000 40,862 22,000 18,316
HR, Purchasing and 1996 248,333 129,000 38,808 18,000 16,621
Communications
- --------------------------------- --------- ----------- --------- ------------------ ------------------ -----------

(A) The amounts shown are dividend equivalents earned as described in Footnote
A of the Option Grants in Last Fiscal Year Table. Dividend equivalents are
not traditional restricted stock but deferred shares with no voting rights
or statutory dividend rights. The deferred shares are subject to forfeiture
until issued to the optionee, which occurs after 4 years provided the
optionee remains in the continuous employ of the Company or a subsidiary
and does not choose to defer issuance to a later date under the Company's
Deferred Compensation Plan. In addition, they may vest earlier than 4 years
in the event of retirement, disability, death or change of control. The
dollar value of the deferred shares earned is equal to the total amount per
share of cash dividends paid on outstanding shares of Common Stock during
the calendar year 1998 multiplied by the number of shares of Common Stock
subject to outstanding options plus unvested deferred shares. In 1998, the
total cash dividend paid on outstanding Common Shares was $.72 per share.
The numbers of deferred shares earned in 1998 were as follows: Mr. Timken:
10,324 shares; Mr. Leibensperger: 6,854 shares; Mr. Bowling: 7,544 shares;
Mr. Strouble: 3,472 shares and Mr. Perry: 3,080 shares.

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(B) As adjusted for stock split effective May 30, 1997.

Mr. Timken:
-----------
$6,800 annual Company contribution to the Savings and Investment Pension
Plan (SIP Plan).
$59,900 annual Company contribution to the Post Tax Savings and
Investment Pension Plan (Post Tax SIP Plan).

Mr. Leibensperger:
------------------
$6,800 annual Company contribution to the SIP Plan.
$29,724 annual Company contribution to the Post Tax SIP Plan.

Mr. Bowling:
------------
$6,800 annual Company contribution to the SIP Plan.
$27,700 annual Company contribution to the Post Tax SIP Plan.

Mr. Strouble:
-------------
$6,800 annual Company contribution to the SIP Plan.
$15,280 annual Company contribution to the Post Tax SIP Plan.

Mr. Perry:
----------
$6,800 annual Company contribution to the SIP Plan.
$15,096 annual Company contribution to the Post Tax SIP Plan.

(D) Mr. Strouble was elected to the position of Vice President - Technology
effective May 1, 1995. He was elected to the position of Senior Vice
President - Technology on January 1, 1998. Mr. Perry was elected to the
position of Vice President Human Resources and Logistics effective March 1,
1993. He was elected Senior Vice President - Human Resources, Purchasing
and Communications on January 1, 1998.

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OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning stock option grants
made to the individuals named in the Summary Compensation Table during 1998
pursuant to The Timken Company Long-Term Incentive Plan, as Amended and
Restated.

GRANT DATE
INDIVIDUAL GRANTS VALUE
- ---------------------------------------------------------------------------------------------------------------- ------------
PERCENT
(A)(B) OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE (C)
UNDERLYING EMPLOYEES OR BASE GRANT DATE
OPTIONS IN FISCAL PRICE EXPIRATION PRESENT VALUE
NAME GRANTED YEAR ($/SHARE) DATE ($)
- ---------------------------- ---------- ---------- --------- -------------- -------------

W. R. Timken, Jr. 90,000 10.4% $33.7500 April 21, 2008 851,400
10,000 1.2% $19.4375 Nov. 18, 2008 78,700
Robert L. Leibensperger 45,000 5.2% $33.7500 April 21, 2008 425,700
7,000 0.8% $19.4375 Nov. 18, 2008 55,090
Bill J. Bowling 45,000 5.2% $33.7500 April 21, 2008 425,700
7,000 0.8% $19.4375 Nov. 18, 2008 55,090
Thomas W. Strouble 22,000 2.6% $33.7500 April 21, 2008 208,120
Stephen A. Perry 22,000 2.6% $33.7500 April 21, 2008 208,120

(A) Options granted on April 21, 1998, are exercisable starting 12 months after
the date granted, with 25% of the options covered thereby becoming
exercisable at that time and with an additional 25% becoming exercisable on
each successive anniversary date. The options granted on April 21, 1998,
provide for the crediting to the optionee of dividend equivalents (amounts
equal to the dividends paid on common stock) payable in the form of Company
Common Stock or cash, but only when total net income per share of the
outstanding Common Stock is at least two and one half times the total
amount of cash dividends paid per share during the calendar year (options
granted prior to 1996 specified an earnings level of two times total cash
dividends paid per share). The agreements pertaining to these options also
provide that such options will become exercisable in full in the event of a
change in control, as defined in such agreements, of the Company. If,
following a change in control, the optionee's employment is terminated, all
dividend equivalents are also vested.

For additional information about dividend equivalents, refer to Footnote A
of the Summary Compensation Table.

(B) A grant of non-qualified stock options was awarded to Messrs. Timken,
Leibensperger and Bowling on November 18, 1998. This award was granted by
the Compensation Committee after receiving notice from these individuals
that they had voluntarily waived their rights to a 1998 cash payment under
performance share grants. These stock options will become exercisable 18
months from the date of grant. This grant of stock options does not provide
for the crediting to the optionee of dividend equivalents. For additional
information about this grant refer to the Compensation Committee Report on
page 19.

(C) The rules on executive compensation disclosure issued by the Securities and
Exchange Commission authorize the use of variations of the Black-Scholes
option pricing model in valuing executive stock options. The Company used
this model to estimate grant date present value. In applying this model,
basic assumptions were made concerning variables such as expected option
term, interest rates, stock price volatility and future dividend yield, to
establish an initial option value. The initial option value was then
reduced to reflect vesting restrictions. This adjustment was accomplished
by discounting the initial option value to reflect estimates of annual
executive turnover and the average vesting period. There is, of course, no
assurance that the value actually realized by an executive will be at or
near the estimated

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14

value, for the actual value, if any, an executive may realize will depend
on the excess of the stock price over the exercise price on the date the
option is exercised.

The following assumptions were used in establishing the initial option
value for the options granted on April 21, 1998: (a) an option term of 8
years, which is the expected life of the option based on historical
experience of stock option exercises by executives at the Company; (b) an
interest rate of 5.74%, which is the interest rate of an 8-year treasury
bond on April 21, 1998; (c) volatility of .2700 calculated using the
quarter ending stock prices for 5 years prior to the grant date; and (d)
dividend yield of 2.78%, the average amount paid annually, over the 5 years
prior to grant date. The following assumptions were used to discount the
initial value for vesting restrictions: (a) discount factor of 3% per year,
the estimated annual turnover for executives excluding retirement, and (b)
an average vesting period of 2.5 years.

For the grant of options on November 18, 1998, the same assumptions were
used in establishing the initial option value as stated above with the
following exceptions: (a) an interest rate of 4.94%, which is the interest
rate of an 8-year treasury bond on November 18, 1998; (b) volatility of
.4282 calculated using the quarter ending stock prices for 5 years prior to
the grant date; (c) a dividend yield of 2.68%, the average amount paid
annually, over the 5 years prior to grant date; and (d) no adjustments were
made to discount the initial value for vesting restrictions.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table sets forth information with respect to stock option
grants for the individuals named in the Summary Compensation Table under The
1985 Incentive Plan of The Timken Company or The Timken Company Long-Term
Incentive Plan, as Amended and Restated.

(A) (B)
Shares Number of Securities Value of
Acquired Value Underlying Options In-The-Money Options
On Exercise Realized At Fiscal Year-End At Fiscal Year-End
(#) ($) (#) ($)
------------------------------ ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------ ----------- --------- ----------- ------------- ----------- -------------

W. R. Timken, Jr. 105,550 1,871,507 56,500 205,000 3,938 2,625

Robert L. Leibensperger 20,000 271,876 58,300 110,500 24,175 1,125

Bill J. Bowling 6,000 135,938 88,450 97,350 267,972 441

Thomas W. Strouble 6,800 107,738 32,000 51,000 13,344 656

Stephen A. Perry 6,000 101,438 23,000 51,000 1,594 656

(A) The value realized on the exercise of options is based on the difference
between the exercise price and the fair market value of the Company's
Common Stock on the date of exercise.

(B) Based on the difference between the exercise price and the closing stock
price on the New York Stock Exchange at year end.

-13-
15

PENSION PLAN TABLE

The following table shows the estimated annual retirement benefits for
Executive Officers in the earnings and years of service combinations
indicated. Amounts shown in the table are developed assuming retirement at
age 62 and Final Average Earnings equal to Remuneration in 1998.

YEARS OF SERVICE (A) (B)
--------------------------------------------------
REMUNERATION (C) 30 35 40
---------------- ------- ------- ---------

$ 300,000 165,375 192,938 220,500
400,000 220,500 257,250 294,000
500,000 275,625 321,563 367,500
600,000 330,750 385,875 441,000
700,000 385,875 450,188 514,500
800,000 441,000 514,500 588,000
900,000 496,125 578,813 661,500
1,000,000 551,250 643,125 735,000
1,100,000 606,375 707,438 808,500
1,200,000 661,500 771,750 882,000
1,300,000 716,625 836,063 955,500
1,400,000 771,750 900,375 1,029,000
1,500,000 826,875 964,688 1,102,500

(A) Amounts in this section of the table have been developed in accordance with
the provisions of the retirement plan and individual agreements based upon
a straight life annuity, not under any of the various survivor options and
before adjustment for Social Security benefits (officers' benefits are
subject to Social Security offsets). These amounts have been determined
without regard to the maximum benefit limitations for defined benefit plans
and the limitations on compensation imposed by the Internal Revenue Code of
1986, as amended. The Board of Directors has authorized a supplemental
retirement plan and individual agreements that direct the payment out of
general funds of the Company of any benefits calculated under the
provisions of the applicable retirement plan that may exceed these limits.

(B) The years of company service as of December 31, 1998, for the individuals
listed in the Summary Compensation Table are 36 for Mr. Timken, 38 for Mr.
Leibensperger, 33 for Mr. Bowling, 42 for Mr. Strouble and 34 for Mr.
Perry. There is no incremental benefit level for years of service in excess
of 40.

(C) Plan benefits are based upon average earnings, including any cash bonus
plan awards for the highest five consecutive years of the ten years
preceding retirement ("Final Average Earnings"). For the years prior to
1994, only fifty percent of any cash bonus plan award is included in the
calculation of average earnings. Final Average Earnings for the individuals
listed in the Summary Compensation Table are $960,648 for Mr. Timken;
$538,380 for Mr. Leibensperger; $410,019 for Mr. Bowling; $352,420 for Mr.
Strouble; and $317,307 for Mr. Perry.

-14-
16

CHANGE IN CONTROL SEVERANCE AGREEMENTS

The Company is a party to Severance Agreements with 14 of its senior
executives (including the executive officers named in the Summary Compensation
Table). Under these Agreements, when certain events occur, such as a reduction
in the individual's responsibilities or termination of the individual's
employment, following a change in control of the Company (as defined in the
Agreements), the individual will be entitled to receive payment in an amount,
grossed up for any excise taxes payable by the individual, equal to three times
the individual's annual base salary and highest annual incentive compensation
during the past three years plus a lump sum amount representing a supplemental
pension benefit. The individual would also receive certain benefits under the
SIP Plan and the Post Tax SIP Plan. The Severance Agreements also permit the
individual to resign for any reason or without reason during the 30-day period
immediately following the first anniversary of the first occurrence of a change
in control and receive the severance benefits. The amounts payable under these
Severance Agreements are secured by a trust arrangement.

CHANGE IN CONTROL SEVERANCE PAY PLAN

The Company has implemented a Severance Pay Plan covering approximately 110
key associates (other than those that are party to Severance Agreements). Under
the Severance Pay Plan, an individual whose employment is terminated following a
change in control (as defined in the Plan) may be entitled to receive payment in
an amount equal to 150% to 200% of the individual's annual base salary
(depending upon length of service), grossed up for any excise taxes payable by
the individual, and may also have certain benefits continued for a period of six
months. The Company has created a trust arrangement to provide funds for the
enforcement of the Severance Pay Plan.

-15-
17

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee (the "Committee") of the Board of Directors is
composed of Stanley C. Gault, Martin D. Walker and Alton W. Whitehouse,
Chairman. No member of the Committee is a former or current officer or employee
of the Company or of any of its subsidiaries.

COMPENSATION PHILOSOPHY
- -----------------------

The Company's compensation philosophy focuses on both short and long-term
incentive programs that, when added to base salary, provide a total compensation
package that will enable the Company to attract and retain superior quality
executive officers. This approach is intended to enhance Company performance and
shareholder value by tying in closely the financial interests of executive
officers and senior managers with those of shareholders. Specifically, the
Committee's philosophy includes these three primary ingredients:

o Provide sufficient opportunity in total direct compensation that
enables the Company to attract, retain and motivate superior quality
executive management.

o Establish base salaries for executive management based upon market data
from a related group of companies.

o Link the financial interests of executive management with those of
shareholders, with short and long-term incentive plans tied to
corporate, business unit and individual performance.

The Company, with the Committee's guidance and approval, has developed a
compensation program based on this philosophy for executive officers, including
the Chief Executive Officer and the other named executive officers. This program
has three components: base salary, performance bonus and long-term incentives.
Base salaries, on average, have been administered at the market median. The
Company relies on its performance bonus and long-term incentive awards, tied
directly to individual, business unit and corporate performance, to provide
total direct compensation at the desired level. The Committee determines
specific compensation actions for the Chief Executive Officer and considers and
acts upon recommendations made by the Chief Executive Officer regarding
compensation of other executive officers and key associates.

In 1998, the Company conducted a review of total direct compensation paid
by companies having, in general, net sales from $1-6 billion dollars and a
subset of this group selected as a benchmark for compensation purposes. Total
direct compensation includes base salary, performance bonus and long-term
incentives. The Company compared total direct compensation opportunity provided
to executive officers to median total direct compensation for the selected
companies as reported in the 1998 Towers Perrin and Management Compensation
Services ("Project 777") executive compensation surveys. Following completion of
this analysis and development of proposed base salary ranges and target bonus
opportunities, an independent compensation consultant reviewed the findings. The
Committee approved management's recommendation for revised base salary ranges
and target bonus opportunities for the executive officer positions effective
January 1, 1999.

The Committee has addressed the impact of Section 162(m) of the Internal
Revenue Code (the "Code") by approving a policy whereby an executive officer may
enter into an agreement to defer any compensation that exceeds the $1 million
limit and by recommending changes to The Timken Company Long-Term Incentive
Plan, as Amended and Restated, allowing certain grants under the plan to qualify
as performance-based compensation. The policy to defer compensation was adopted
in November 1994 and went into effect beginning with the year 1995. Amounts of
compensation that are deferred will be credited with interest quarterly at the
prime rate in effect on the last day of the calendar quarter plus 1%. The
Committee believes that this policy has benefited the Company by preserving the
tax deduction for executive compensation while maintaining the ability to use
appropriate discretion in determining annual levels of compensation. Messrs.
Timken, Leibensperger and Bowling have signed individual agreements to defer any
compensation that exceeds the $1 million limit, as defined in Section 162(m) of
the Code, for 1998.

-16-
18

The Management Performance Plan meets the spirit of performance-based
compensation as described in Section 162(m) of the Code, however, the Committee
has recommended to the Board of Directors the adoption, subject to shareholder
approval, of the Senior Executive Management Performance Plan, which is more
fully described in Item No. 3 of this Proxy Statement. It is the intention of
the Committee and the Board of Directors to continue the existing annual
incentive plan described above for those executive officers not selected to
participate in the new plan.

BASE SALARY
- -----------

Base salary ranges are developed to reflect the varying levels of
responsibility of the Chief Executive Officer and other executive officers. The
current salary ranges are based on external surveys and in consultation with an
independent compensation consultant. Base salary ranges generally are equivalent
to amounts paid to senior managers with comparable responsibilities for the
companies studied. Periodically, the Committee reviews the recommendations of
the Chief Executive Officer and the Senior Vice President - Human Resources,
Purchasing and Communications and approves, with any modifications it deems
appropriate, individual base salary amounts for executive officers based on
individual performance and position in the salary range.

The companies included in the surveys used to develop base salary ranges
are not the same companies used in the peer group index appearing in the
performance graph. For compensation purposes, the Company uses surveys of
companies of similar size and industry because this is the employment market in
which it competes. The performance graph, on the other hand, employs a peer
index blending the S&P Steel Index and six bearing companies that are direct
competitors of the Company's Bearing Business. Of the six bearing companies,
five are foreign companies. The reason for selecting the companies in the peer
index had no relationship to compensation comparisons, where the Company seeks
to look at other companies of similar size and industry that are more
representative of the employment market for executive management whether or not
they are in the bearing or steel business.

PERFORMANCE BONUS
- -----------------

The Company's Management Performance Plan provides cash bonuses to be paid
to executive officers and senior managers based principally on the achievement
of specific operating performance goals established annually by the Committee
and thereafter approved by the Board.

Management recommends performance goals to the Committee based upon
business plans approved by management and reviewed with the Board of Directors.

In 1998, the Management Performance Plan provided for target bonus
opportunities for executive officers that ranged from 40 to 70 percent of base
salary, though amounts could vary above and below that range depending upon
company and business unit performance (including financial and non-financial
measures) and individual accomplishment. The bonus opportunity for the Chairman,
President and Chief Executive Officer was based upon the attainment of corporate
goals and individual performance, with bonus opportunities for the other
executive officers based on a combination of corporate, business unit and
individual performance. The Company requires a minimum level of earnings to fund
any bonuses.

The Plan's primary performance measurement is Return on Invested Capital
defined as Earnings Before Interest and Taxes as a percentage of Beginning
Invested Capital (EBIT/BIC). This measure is closely correlated with the
creation of shareholder value and is the major measure from which the bonus pool
is derived. In addition, for 1998 specific goals were established for three
additional key measures all aligned with the creation of shareholder and
customer value. The measures were achievement of Business Plan targets for Sales
Growth, achievement of Business Plan targets for Inventory Days, and achievement
of Customer Satisfaction goals.

Return on Capital and earnings for the year did not meet the threshold
target necessary to generate a bonus fund. No bonus awards were paid to
executive officers for 1998.

-17-
19

At its December meeting, the Board approved the goals set by the Committee
for the Management Performance Plan for 1999. In addition to corporate and
business unit EBIT/BIC and sales growth goals, other key areas of emphasis will
be free cash flow targets and customer satisfaction goals. Also at its December
meeting, the Board approved goals set by the Committee for the Senior Executive
Management Performance Plan for 1999, contingent upon shareholder approval of
the plan. Specific targets were established for Corporate EBIT/BIC, sales growth
and free cash flow.

Target bonus opportunity for executive officers in 1999 will range from 40
to 70 percent of base salary. The target bonus may be adjusted for achievement
of the specific EBIT/BIC goals and discretionary adjustments may be made by the
Committee for some executive officers for the achievement of the other key
performance targets.

LONG-TERM INCENTIVES
- --------------------

The Committee administers the Company's Long-Term Incentive Plan, as
Amended and Restated, which was approved by shareholders effective April 16,
1996. The number of shares that may be issued or transferred under the Plan may
not exceed in the aggregate 5,800,000 shares of Common Stock (adjusted for the
stock split effective May 30, 1997). Although awards under the Plan can be made
in the form of non-qualified stock options, incentive stock options,
appreciation rights, performance shares or performance units, restricted shares
and deferred shares, the Committee has chosen primarily to grant non-qualified
stock options. The option price per common share must be equal to or greater
than the market value per share on the date of the grant. For grants to
executive officers and the Chief Executive Officer, the Committee has granted
non-qualified stock options with an option price at market value on the date of
grant. The use of non-qualified stock options enables executive officers and
other participants to gain value if the Company's shareholders gain value.
Moreover, this Plan provides a mechanism for incentives to participants even in
years when no payout is made under the Management Performance Plan. Deferred
shares or restricted shares have not been granted to executive officers except
when the individual has been hired into the position from outside the Company.

Awards under the Long-Term Incentive Plan, as Amended and Restated, are
considered annually. On April 21, 1998, the Committee approved a grant of
non-qualified stock options for the executive officers and other key associates.
The initial dollar value for each participant's grant was determined by
multiplying the midpoint of their salary range by a position level multiple that
ranged from .45 to 2.74. The position level multiples were derived from data on
similar-sized companies comparable for compensation purposes as reported in the
Towers Perrin Long-Term Incentive Survey compiled in 1997. The number of stock
options to grant was calculated by dividing each participant's salary range
midpoint by the present value of the Company's stock options including dividend
credits. The present value of the option was based on achieving a 12% growth in
stock price and a 6% growth in dividend yield per year and was adjusted to
reflect vesting restrictions. After this initial determination, management
reviewed and revised as necessary the size of the proposed grant based on
individual performance. The Chief Executive Officer and the Senior Vice
President - Human Resources, Purchasing and Communications presented the
recommended grants to the Committee. The Committee reviewed and, after making
certain adjustments, approved the long-term incentive grants considering the
formula, individual performance and the number of shares allocated to the Plan.

To drive the achievement of higher levels of earnings, the Long-Term
Incentive Plan, as Amended and Restated, has a dividend feature that provides
additional compensation only when the Company achieves a specified level of
earnings. This feature entitles each participant in the Plan to receive dividend
equivalents payable in Common Stock on a deferred basis (called Deferred
Dividend Shares) or cash. The dividend equivalent is calculated by multiplying
the cash dividend per share paid during the year earned times the number of
unexercised stock options plus any unvested Deferred Dividend Shares previously
earned on currently unexercised options held by each participant. The product is
divided by the average closing price of the Company's Common Stock as reported
on the New York Stock Exchange for the 10 days preceding December 31 to
establish the number of Deferred Dividend Shares that are credited to each
participant. Unexercised stock options and unvested Deferred Dividend Shares
awarded to active participants prior to 1996 will earn dividend credits if net
income per share for the year exceeds 200 percent of the total amount of cash
dividends per share during the year. Unexercised stock options and unvested
Deferred Dividend

-18-
20

Shares awarded to active participants after 1995 will earn dividend credits if
net income per share for the year exceeds 250 percent of the total amount of
cash dividends per share during the year. In no event may any participant in any
period of one calendar year earn Deferred Dividend Shares with a value in excess
of $750,000. The Deferred Dividend Shares vest 4 years from the date of grant if
the associate is still in the employ of the Company and does not choose to defer
them under the Company's Deferred Compensation Plan. The Deferred Dividend
Shares may vest earlier than 4 years in the event of retirement, disability,
death or change of control. The total number of Deferred Dividend Shares granted
for 1998 was 119,054.

A special grant of performance shares was approved by the Committee
effective January 1, 1998. Specific targets for share price growth over a three
year period (1998-2000) will be rewarded. Awards can be paid annually in cash if
specific annual targets are achieved during each of the three years. These
grants were made to the Chief Executive Officer and the two chief operating
officers on January 1, 1998. The share price exceeded the threshold price for 15
days out of 90 consecutive days, which would result in payment of an award for
1998 based on the provisions of the grants. Although the share price did achieve
a level above the threshold price and held it for the requisite period under the
awards, entitling the individuals to payments for 1998, on November 11, 1998,
they notified the Committee that they did not feel fully justified in accepting
payment for the 1998 performance shares. Their decision to waive the 1998
payments had been prompted by the decrease in the market price of the shares and
the deterioration in the Company's financial performance during the second half
of the year. The individuals had also noted that they did not expect the
associates who participate in the Management Performance Plan to receive any
significant payments for 1998.

On November 18, 1998, the Committee awarded additional non-qualified stock
options to the Chief Executive Officer and the two chief operating officers, as
reported in the Option Grants In Last Fiscal Year Table included in this proxy
statement. The Committee decided to grant the November awards after it received
notice from these individuals that they had voluntarily decided to waive their
rights to cash payments for 1998 under special performance share grants made at
the beginning of the year under the Long-Term Incentive Plan, as Amended and
Restated. In fixing the number of shares covered by the November 18, 1998,
option awards, the Committee took into account the amount of cash that would
have been received for the 1998 performance share awards. If the market price of
the Company's Common Stock regains the levels that would have been used to
calculate the foregone payments, the spread on the options will then equal the
same amount. The performance share awards continue in force for the remaining
years for which they were originally granted (1999 and 2000).

Share ownership requirements have been established for executive officers
and other key executives. These guidelines recommend a specific level of
ownership be achieved within five years (seven years can be used for some
exceptional circumstances) of the effective date of the guidelines. The specific
levels of ownership were increased from one to three times salary to one and
one-half to five times salary in 1998. An additional two or three years has been
allowed to achieve the higher ownership target.

CHIEF EXECUTIVE OFFICER COMPENSATION
- ------------------------------------

The Chief Executive Officer's compensation is based upon the same factors
previously discussed with regard to the executive officer compensation
philosophy. The components making up his compensation include base salary,
performance bonus and long-term incentives. The base salary range for the Chief
Executive Officer is determined using survey data in the same manner as for
other executive officers. Effective on January 1, 1998, with his election as
Chairman, President and Chief Executive Officer, Mr. Timken's base salary was
established at $850,000 per year.

The Chief Executive Officer's compensation is related to the Company's
performance through the Management Performance Plan and the Long-Term Incentive
Plan, as Amended and Restated. The methodology used to calculate Mr. Timken's
compensation under either plan is the same as for other executive officers.

The Company's overall earnings performance did not meet the threshold
established for 1998 and no bonus award was paid to Mr. Timken.

-19-
21

On April 21, 1998, Mr. Timken, along with the other executive officers,
received non-qualified stock options pursuant to the provisions of The Timken
Company Long-Term Incentive Plan, as Amended and Restated, approved by
shareholders on April 16, 1996. Mr. Timken received non-qualified stock options
for 90,000 shares as a result of the 1998 grant. Additionally, on November 18,
1998, Mr. Timken received a one-time grant of 10,000 non-qualified stock options
after Mr. Timken gave notice of his voluntary waiver of a cash payment for 1998
under the performance share award described above.

The Company's earnings performance in 1998 exceeded the threshold necessary
to award dividend credits. As a result, on December 31, 1998, Mr. Timken, along
with the other executive officers, was credited with Deferred Dividend Shares
representing 10,324 shares, which will vest on December 31, 2002.

Sales for 1998 came in at a record level of $2.68 billion. While the
company's earnings did not meet the goals set for 1998, there have been only 2
years in the company's history when earnings have been more than the $114.5
million earned in 1998. Cash flow from operations was the second highest
achieved. Though record levels of sales and earnings were achieved during the
first half of the year, a combination of events--the global financial crisis,
higher energy costs, a major capacity start-up, a prolonged strike at a major
customer and equipment failure--negatively impacted sales and earnings for the
year.

Under Mr. Timken's leadership, the company took swift and decisive actions
to build on the strong company fundamentals and to provide a solid foundation to
continue the company's profitable growth into the future. In moving aggressively
to reduce costs, Mr. Timken has been mindful not to take actions that would
jeopardize that growth. To assure future success investment continues in capital
spending, research and development, new products, acquisitions and joint
ventures.

The Committee believes the new management team put into place on January 1,
1998, developed well under Mr. Timken's direction.

The Company's five-year cumulative total return of 28% continues to lead
other bearing and steel companies as reported in the peer index, however, it has
fallen behind the cumulative return represented by the S&P 500 index.

Compensation Committee

Alton W. Whitehouse, Chairman
Stanley C. Gault
Martin D. Walker

-20-
22

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG TIMKEN COMPANY, S&P 500 & PEER INDEX**

[GRAPH]

Assumes $100 invested on January 1, 1994, in Timken Company Common Stock, S&P
500 Index and Peer Index.

1994 1995 1996 1997 1998
---- ---- ---- ---- ----

TIMKEN COMPANY $107.90 $120.36 $148.09 $227.15 $128.41
S&P 500 101.31 139.26 171.23 228.35 293.61
70% BEARING/30% STEEL 122.19 117.30 119.57 93.74 89.19

The line graph compares the cumulative total shareholder returns over five years
for The Timken Company, the S&P 500 Stock Index, and a peer index that
proportionally reflects The Timken Company's two businesses. The S&P Steel Index
comprises 30% of the peer index and the remaining 70% is a self constructed
bearing index that consists of six companies. These six companies are Kaydon,
FAG, Koyo, NSK, NTN and SKF. The last five are non-US bearing companies that are
based in Germany, Japan and Sweden. The total returns for these markets
equivalent to the S&P 500 Index were $218.64, $84.41 and $277.82, respectively,
with a $100 investment over five years.

-21-
23

ITEM NO. 3
APPROVAL OF THE TIMKEN COMPANY
SENIOR EXECUTIVE MANAGEMENT PERFORMANCE PLAN

For the past several years the principal vehicle for providing annual cash
incentive compensation to executive officers and senior managers has been the
Company's Management Performance Plan. The Company proposes to continue using
the Management Performance Plan to provide these incentives, but also to adopt a
new plan that will meet the requirements of Section 162(m) of the Internal
Revenue Code. Generally, Section 162(m) prevents a company from receiving a
federal income tax deduction for compensation paid to any one of the five most
highly compensated executive officers in excess of $1 million for any year,
unless that compensation is performance-based. One of the requirements of
"performance-based compensation" for purposes of Section 162(m) is that the
compensation be paid pursuant to a plan that has been approved by the company's
shareholders.

The Senior Executive Management Performance Plan (the "Plan"), which will
be presented to the Company's shareholders for consideration at the Annual
Meeting, would replace the existing Management Performance Plan, beginning in
1999, for the Chief Executive Officer and potentially other Executive Officers.
The principal change required by Section 162(m) would be that the Committee
would no longer have the same flexibility under the Plan as in the past to
exercise discretion in making adjustments to meet individual circumstances and
reflect the outcome of performance objectives. The Plan will require the
Committee to use goals and formulas that could be verified by an independent
third party, without the exercise of discretion, except to reduce the amount of
compensation that might otherwise be payable under the Plan.

Subject to approval of the Plan by shareholders, the Compensation Committee
has already established performance goals for 1999 based on Return on Invested
Capital, Sales Growth and Free Cash Flow. These measures are substantially the
same as those used for 1998, as described in the Compensation Committee Report
on Executive Compensation. In future years, the Committee could continue to use
these performance measures under the Plan or could select another objective or
combination of objectives from the list described below.

SUMMARY OF TERMS. The following is a summary of the terms of the Plan and
is qualified in its entirety by reference to the complete text of the Plan,
which is set forth in Appendix A.

o ADMINISTRATION. The Plan will be administered by the Compensation
Committee or another committee (consisting of at least two directors,
each of whom must be an "outside director" within the meaning of Section
162(m)) appointed by the Board. In administering the Plan, the Committee
will have full power and authority to interpret the Plan and establish
Management Objectives and the amount of bonuses payable upon achievement
of such objectives.

o ELIGIBLE EXECUTIVES. Participation in the Plan will be limited to
"Eligible Executives," which is defined as the Company's Chief Executive
Officer and any other designated executive officer of the Company that
in the Committee's judgement could, in the absence of the Plan, be paid
compensation the deductibility of which could be limited by Section
162(m) of the Code. Participation in the Plan is limited to the
Company's executive officers designated by the Committee. As noted
above, the Committee has determined that the Chief Executive Officer
will be the only participant in the Plan for 1999. The other executive
officers will continue to participate in the Management Performance Plan
for 1999.

o MANAGEMENT OBJECTIVES. An Eligible Executive's right to receive a bonus
under the Plan depends on achievement of certain specified performance
goals, referred to as Management Objectives. Management Objectives may
be described in terms of either Company-wide objectives or objectives
that are related to the performance of the individual participant or
subsidiary, division, department or function within the Company or a
subsidiary in which the participant is employed. Management Objectives
must be limited to specified levels of, growth in or relative peer
company performance in: cash flow, cost of capital, debt reduction,
earnings, earnings before interest and taxes, earnings per

-22-
24

share, economic value added, free cash flow, inventory management, net
income, productivity improvement, profit after tax, reduction of fixed
costs, return on assets, return on equity, return on invested capital,
sales, and/or shareholder return. Management objectives may be stated as
a combination of the preceding factors.

o ESTABLISHMENT OF BONUS AMOUNTS. (a) Not later than the 90th day of each
fiscal year of the Company, the Committee must establish the Management
Objectives for each Eligible Executive and the bonus amount payable (or
formula for determining such amount) upon full achievement of the
specified Management Objectives. The Committee may further specify in
respect of the specified Management Objectives a minimum acceptable
level of achievement below which no payment will be made and shall set
forth a formula for determining the amount of any payment to be made if
performance is at or above the minimum acceptable level but falls short
of full achievement of the specified Management Objectives. The
Committee may not modify the specified Management Objectives, except to
the extent that after such modification the bonus payments would
continue to constitute qualified "performance-based compensation" for
purposes of Section 162(m); (b) The Committee retains the discretion to
reduce the amount of any bonus that would be otherwise payable to an
Eligible Executive (including a reduction in such amount to zero); (c)
Notwithstanding any other provision of the Plan to the contrary, in no
event shall the bonus paid to an Eligible Executive for a year exceed
$2,000,000.

o COMMITTEE CERTIFICATION AND DETERMINATION OF INCENTIVE BONUSES. As soon
as practicable after the end of each fiscal year, the Committee will
certify in writing whether the stated performance goals have been met
and will determine the amount of the bonus to be paid to each Plan
participant.

o EFFECTIVE DATE. If the Plan is approved by shareholders, it will be
effective as of January 1, 1999, and will continue in effect until
December 31, 2003. The Board, however, may suspend or terminate the Plan
at any time.

PLAN BENEFITS. Since the plan affords the Committee discretion in
establishing target bonuses (subject to the $2,000,000 annual limit per person
noted above), it is not possible to determine the amount of the benefits that
may become payable under the Plan. For 1999, the bonus that will be payable to
the Chief Executive Officer, if the Management Objectives established by the
Committee for him are achieved, would be $565,250. The maximum bonus payable to
him for 1999, if the Management Objectives were achieved at the maximum level,
would be $969,850. If the plan had been in effect for 1998, instead of the
Management Performance Plan, the payment would have been zero. As noted above,
the Chief Executive Officer is the only participant in the plan for 1999. If the
Plan is not approved by shareholders, such bonus under this Plan will not be
paid.

FEDERAL INCOME TAX CONSEQUENCES. Under present federal income tax law, a
Plan participant will be taxed at ordinary income rates on the amount of any
payment received pursuant to the Plan. Generally, and subject to the provisions
of Section 162(m), the Company will receive a federal income tax deduction
corresponding to the amount of income recognized by a Plan participant.

VOTE REQUIRED TO APPROVED THE PLAN. A favorable vote of a majority of votes
cast on the matter is necessary for approval of the Plan. Abstentions and broker
non-votes will not be counted for determining whether the Plan is approved.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL
OF THE SENIOR EXECUTIVE MANAGEMENT PERFORMANCE PLAN.

-23-
25

AUDITORS

The independent accounting firm of Ernst & Young LLP has acted as the
Company's auditor for many years and has been selected as the auditor for the
current year. Representatives of that firm are expected to be present at the
Annual Meeting and will have an opportunity to make a statement, if they so
desire, and will be available to respond to appropriate questions.

SUBMISSION OF SHAREHOLDER PROPOSALS

The Company must receive by October 29, 1999, any proposal of a shareholder
intended to be presented at the 2000 Annual Meeting of shareholders and to be
included in the Company's proxy materials related to the 2000 Annual Meeting
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the "Exchange
Act"). Such proposals should be submitted by certified mail, return receipt
requested. Proposals of shareholders submitted outside the processes of Rule
14a-8 under the Exchange Act in connection with the 2000 Annual Meeting
("Non-Rule 14a-8 Proposals") must be received by the Company by January 12,
2000, or such proposals will be considered untimely under Rule 14a-4(c) of the
Exchange Act. The Company's proxy related to the 2000 Annual Meeting will give
discretionary authority to the proxy holders to vote with respect to all
Non-Rule 14a-8 Proposals received by the Company after January 12, 2000.

GENERAL

On the record date of February 19, 1999, there were outstanding 61,876,547
shares of Common Stock, each entitled to one vote upon all matters presented to
the meeting.

The enclosed proxy is solicited by the Board of Directors, and the entire
cost of solicitation will be paid by the Company. In addition to solicitation by
mail, Officers and regular employees of the Company, without extra remuneration,
may solicit the return of proxies by telephone, telegraph, facsimile, personal
contact or other means of communication. Brokerage houses, nominees, fiduciaries
and other custodians will be requested to forward soliciting material to the
beneficial owners of shares held of record by them and will be reimbursed for
their expenses. The Company has retained Georgeson & Co. to assist in the
solicitation of proxies for a fee not to exceed $9,500, plus reasonable
out-of-pocket expenses.

Shares represented by properly executed proxies will be voted at the
meeting in accordance with the shareholders' instructions. In the absence of
specific instructions, the shares will be voted for the election of Directors as
indicated under Items No. 1 and 2 and FOR Item 3.

You may, without affecting any vote previously taken, revoke your proxy by
a later dated proxy received by the Company, or by giving notice to the Company
either in writing or at the meeting.

First Chicago Trust Company of New York will be responsible for tabulating
the results of shareholder voting. First Chicago will submit a total vote only,
keeping all individual votes confidential. Representatives of First Chicago will
serve as inspectors of election for the Annual Meeting. Under Ohio law and the
Company's Amended Articles of Incorporation and Amended Regulations, properly
executed proxies marked "abstain" will be counted for purposes of determining
whether a quorum has been achieved at the Annual Meeting, but proxies
representing shares held in "street name" by brokers that are not voted will not
be counted for quorum purposes. Such abstentions and "broker non-votes" will not
be counted in the election of Directors.

AFTER APRIL 1, 1999, THE COMPANY WILL FURNISH TO EACH SHAREHOLDER, UPON
WRITTEN REQUEST AND WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998, INCLUDING FINANCIAL STATEMENTS
AND SCHEDULES THERETO, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
REQUESTS SHOULD BE ADDRESSED TO SCOTT A. SCHERFF, DIRECTOR - LEGAL SERVICES AND
ASSISTANT SECRETARY, THE TIMKEN COMPANY, 1835 DUEBER AVENUE, S.W. - GNE-01,
CANTON, OHIO 44706-2798.

-24-
26

APPENDIX A

THE TIMKEN COMPANY
SENIOR EXECUTIVE MANAGEMENT PERFORMANCE PLAN

1. PURPOSE. The purpose of the Senior Executive Management Performance
Plan (the "Plan") is to attract and retain key executives for The Timken
Company, an Ohio corporation (the "Corporation"), and its Subsidiaries and to
provide such persons with incentives and rewards for superior performance.
Incentive bonus payments made under the Plan are intended to constitute
qualified "performance-based compensation" for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended, and Section 1.162-27 of the
Regulations promulgated thereunder, and the Plan shall be construed consistently
with such intention.

2. DEFINITIONS. As used in this Plan,

"BOARD" means the Board of Directors of the Corporation.

"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

"COMMITTEE" means the Compensation Committee of the Board or any other
committee appointed by the Board to administer the Plan; provided,
however, that in any event the Committee shall be comprised of not less
than two directors of the Corporation, each of whom shall qualify as an
"outside director" for purposes of Section 162(m) of the Code and
Section 1.162-27(e)(3) of the Regulations.

"ELIGIBLE EXECUTIVE" means the Corporation's Chief Executive Officer
and any other designated executive officer of the Corporation that in
the Committee's judgement could, in the absence of the Plan, be paid
compensation the deductibility of which, to the Corporation, could be
limited by Section 162(m) of the Code.

"INCENTIVE BONUS" shall mean, for each Eligible Executive, a bonus
opportunity amount determined by the Committee pursuant to Section 5
below.

"MANAGEMENT OBJECTIVES" means the achievement of a performance
objective or objectives established pursuant to this Plan for Eligible
Executives. Management Objectives may be described in terms of
Corporation-wide objectives or objectives that are related to the
performance of the individual Eligible Executive or of the Subsidiary,
division, department or function within the Corporation or Subsidiary
in which the Eligible Executive is employed. The Management Objectives
shall be limited to specified levels of, growth in or relative peer
company performance in--cash flow, cost of capital, debt reduction,
earnings, earnings before interest and taxes, earnings per share,
economic value added, free cash flow, inventory management, net income,
productivity improvement, profit after tax, reduction of fixed costs,
return on assets, return on equity, return on invested capital, sales,
and/or shareholder return. Management objectives may be stated as a
combination of the preceding factors.

"REGULATIONS" mean the Treasury Regulations promulgated under the Code,
as amended from time to time.

"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has
a direct or indirect ownership or other equity interest.

-25-
27

3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee, which shall have full power and authority to construe, interpret and
administer the Plan and shall have the exclusive right to establish Management
Objectives and the amount of Incentive Bonus payable to each Eligible Executive
upon the achievement of the specified Management Objectives.

4. ELIGIBILITY. Eligibility under this Plan is limited to Eligible
Executives designated by the Committee in its sole and absolute discretion.

5. AWARDS.

(a) Not later than the 90th day of each fiscal year of the
Corporation, the Committee shall establish the Management Objectives for
each Eligible Executive and the amount of Incentive Bonus payable (or
formula for determining such amount) upon full achievement of the
specified Management Objectives. The Committee may further specify in
respect of the specified Management Objectives a minimum acceptable
level of achievement below which no Incentive Bonus payment will be made
and shall set forth a formula for determining the amount of any payment
to be made if performance is at or above the minimum acceptable level
but falls short of full achievement of the specified Management
Objectives. The Committee may not modify any terms of awards established
pursuant to this section, except to the extent that after such
modification the Incentive Bonus would continue to constitute qualified
"performance-based compensation" for purposes of Section 162(m) of the
Code.

(b) The Committee retains the discretion to reduce the amount of
any Incentive Bonus that would be otherwise payable to an Eligible
Executive (including a reduction in such amount to zero).

(c) Notwithstanding any other provision of the Plan to the
contrary, in no event shall the Incentive Bonus paid to an Eligible
Executive under the Plan for a year exceed $2,000,000.

6. COMMITTEE CERTIFICATION. As soon as reasonably practicable after the end
of each fiscal year of the Corporation, the Committee shall determine whether
the Management Objective has been achieved and the amount of the Incentive Bonus
to be paid to each Eligible Executive for such fiscal year and shall certify
such determinations in writing.

7. PAYMENT OF INCENTIVE BONUSES. Subject to a valid election made by an
Eligible Executive with respect to the deferral of all or a portion of his or
her Incentive Bonus, Incentive Bonuses shall be paid within 30 days after
written certification pursuant to Section 6.

8. NO RIGHT TO BONUS FOR CONTINUED EMPLOYMENT. Neither the establishment of
the Plan, the provision for or payment of any amounts hereunder nor any action
of the Corporation, the Board or the Committee with respect to the Plan shall be
held or construed to confer upon any person (a) any legal right to receive, or
any interest in, an Incentive Bonus or any other benefit under the Plan or (b)
any legal right to continue to serve as an officer or employee of the
Corporation or any Subsidiary of the Corporation.

9. WITHHOLDING. The Corporation shall have the right to withhold, or
require an Eligible Executive to remit to the Corporation, an amount sufficient
to satisfy any applicable federal, state, local or foreign withholding tax
requirements imposed with respect to the payment of any Incentive Bonus.

10. NONTRANSFERABILITY. Except as expressly provided by the Committee, the
rights and benefits under the Plan shall not be transferable or assignable other
than by will or the laws of descent and distribution.

11. EFFECTIVE DATE. Subject to its approval by the shareholders, this Plan
shall become effective January 1, 1999, and shall remain effective until the
December 31, 2004, subject to any further shareholder approvals (or reapprovals)
mandated for performance-based compensation under Section 162(m) of the Code,
and subject to the right of the Board to terminate the Plan, on a prospective
basis only, at any time.

-26-

28
THE TIMKEN COMPANY

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned instructs American Express Trust Company to appoint W. R.
Timken, Jr., Robert L. Leibensperger, Bill J. Bowling, and Larry R. Brown,
P and each of them, as true and lawful proxies, with full power of
R substitution, to vote and act for the undersigned at the Annual Meeting of
O Shareholders of THE TIMKEN COMPANY to be held at 1835 Dueber Avenue, S.W.,
X Canton, Ohio, on April 20, 1999, at 10:00 A.M., and at any adjournment
Y thereof, as fully as the undersigned could vote and act if personally
present on the matters set forth on the reverse hereof, and, in their
discretion on such other matters as may properly come before the meeting.

ITEM 1. ELECTION OF DIRECTORS.

Elect J. Clayburn La Force, Jr., Robert W. Mahoney, Jay A. Precourt and
Joseph F. Toot, Jr. in Class II for a term expiring at the 2002 Annual
Meeting.

ITEM 2. ELECTION OF DIRECTOR.

Elect John A. Luke, Jr. in Class I for a term expiring at the 2001 Annual
Meeting.

ITEM 3. APPROVAL OF THE TIMKEN COMPANY SENIOR EXECUTIVE MANAGEMENT
PERFORMANCE PLAN.

PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
FOR THE TIMKEN COMPANY HOURLY PENSION INVESTMENT PLAN AND
MAIL IN THE ENCLOSED ENVELOPE. -------------
SEE REVERSE
SIDE
-------------

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

TIMKEN

ANNUAL MEETING
OF
SHAREHOLDERS

April 20, 1999
10:00 a.m.

Corporate Auditorium (C1G)
The Timken Company
1835 Dueber Avenue, S.W.
Canton, Ohio 44706-2798
Telephone: (330) 438-3000

[Map Corporate Auditorium and Visitor's Parking]

PARKING: Shareholders attending the meeting may
park in the visitor lot behind the Corporate Office building.

NOTE: If your shares are held in street name, please bring a letter with you
from your broker stating as such to the annual meeting.

[Map Major Routes to the Timken Company]
29
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD
OF DIRECTORS UNLESS OTHERWISE SPECIFIED.

- ------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THESE ITEMS.
- ------------------------------------------------------------------------------------------------

FOR WITHHELD FOR WITHHELD
1. Election of [ ] [ ] 2. Elect John A. Luke, Jr. in [ ] [ ]
Directors. Class I for a term expiring
(see reverse) at the 2001 Annual Meeting.

3. Approval of The Timken FOR AGAINST ABSTAIN
For, except vote withheld from Company Senior Executive [ ] [ ] [ ]
the following nominee(s): Management Performance Plan.

- --------------------------------
- ------------------------------------------------------------------------------------------------

NOTE: Please sign exactly as name or
names appears hereon. Joint
owners should each sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such.

---------------------------------------
Signature(s) of Shareholder(s) Date

---------------------------------------
Signature if held jointly Date

================================================================================
FOLD AND DETACH HERE

THE TIMKEN COMPANY
CANTON, OHIO

----------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

----------------------------------------

The Annual Meeting of Shareholders of The Timken Company will be held on
Tuesday, April 20, 1999, at 10:00 A.M., at 1835 Dueber Avenue, S.W., Canton,
Ohio, for the following purposes:

1. To elect four Directors to serve in Class II for a term of three
years.

2. To elect one Director to serve in Class I for a term of two
years.

3. To approve The Timken Company Senior Executive Management
Performance Plan.

4. To transact such other business as may properly come before the
meeting.

Holders of Common Stock of record at the close of business on February 19,
1999, are the shareholders entitled to notice of and to vote at the meeting.

PLEASE SIGN, DATE AND RETURN THE PROXY CARD ABOVE, WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING. For your convenience, a self-addressed envelope is
enclosed requiring no postage if mailed in the United States.

If you have any questions about the voting procedure, please contact Kerri
Weis at (330) 471-3378.

LARRY R. BROWN
Senior Vice President and General Counsel
February 24, 1999