TIMKEN CO
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>5
<FILENAME>ex-1036.htm
<TEXT>
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</head>
<PRE>                          Exhibit 10.36

</PRE>
<PRE>                                                 Amended as of December 17, 2003</PRE>
<PRE>                                   AMENDMENT NO. 2
                                        TO
                                 THE TIMKEN COMPANY
                         1996 DEFERRED COMPENSATION PLAN</PRE>
<PRE>     The Timken Company hereby adopts this Amendment No. 2 to the 1996 Deferred</PRE>
<PRE>Compensation Plan for The Timken Company (the &quot;Plan&quot;), effective as of</PRE>
<PRE>December ___, 2003. Words and phrases used herein with initial capital letters</PRE>
<PRE>that are defined in the Plan are used herein as so defined, provided, however,</PRE>
<PRE>in the case where a word or phrase used herein with initial capital letters is</PRE>
<PRE>specifically identified as being used herein as defined in The Timken Company -</PRE>
<PRE>Latrobe Steel Company Savings and Investment Pension Plan (referred to herein as</PRE>
<PRE>the &quot;Savings and Investment Pension Plan&quot;), the word or phrase shall be used</PRE>
<PRE>herein as so defined in the Savings and Investment Pension Plan.
</PRE>
<PRE>     Article VI of the Plan is hereby added to the Plan to read as follows:</PRE>
<PRE>                                   ARTICLE VI
</PRE>
<PRE>                           EXCESS CORE CONTRIBUTIONS</PRE>
<PRE>     1.  Purpose.  The purpose of this Article VI is to amend the Plan such that</PRE>
<PRE>certain contributions designated by the Company (referred to herein as &quot;Excess</PRE>
<PRE>Core Contributions&quot;) may be deferred and paid to Eligible Associates under the</PRE>
<PRE>terms of the Plan.  The provisions of this Article VI shall supercede the</PRE>
<PRE>provisions of Article II with respect to Excess Core Contributions.  All other</PRE>
<PRE>provisions of the Plan shall apply to Excess Core Contributions.</PRE>
<PRE>     2.  Designation of Excess Core Contributions.  Prior to the beginning of a</PRE>
<PRE>Year in which the Company may make an Excess Core Contribution(s) with respect
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to an Eligible Associate, the General Manager - Total Rewards of the Company (or</PRE>
<PRE>other Company administrative representative as may be designated by the</PRE>
<PRE>Committee) shall notify the Eligible Associate of the formula to determine the</PRE>
<PRE>amount of the Excess Core Contribution(s) for the Eligible Associate and timing</PRE>
<PRE>of such Excess Core Contribution(s).</PRE>
<PRE>     3.  Vested Excess Core Contributions and Unvested Excess Core</PRE>
<PRE>Contributions.  In the case of an Eligible Associate with at least three Years</PRE>
<PRE>of Service (as defined in and determined under the Savings and Investment</PRE>
<PRE>Pension Plan) (&quot;Years of Service&quot;) as of the date an Excess Core Contribution is</PRE>
<PRE>made with respect thereto, such Excess Core Contribution shall be referred to</PRE>
<PRE>herein as a &quot;Vested Excess Core Contribution&quot;.  In the case of an Eligible</PRE>
<PRE>Associate with less than three Years of Service as of the date an Excess Core</PRE>
<PRE>Contribution is made with respect thereto, such Excess Core Contribution shall</PRE>
<PRE>be referred to herein as an &quot;Unvested Excess Core Contribution&quot;.</PRE>
<PRE>     4. Election to Defer.  An Eligible Associate who desires to defer all or</PRE>
<PRE>part of his or her Vested or Unvested Excess Core Contribution(s) for a Year</PRE>
<PRE>pursuant to this Plan must complete and deliver an Election Agreement to the</PRE>
<PRE>General Manager - Total Rewards of the Company (or other Company administrative</PRE>
<PRE>representative as may be designated by the Committee) prior to the beginning of</PRE>
<PRE>the Year for which the Excess Core Contribution(s) are made.  Notwithstanding</PRE>
<PRE>the preceding sentence, (i) with respect to any Excess Core Contribution(s) for</PRE>
<PRE>2004, an Eligible Associate may deliver an Election Agreement within 30 days of</PRE>
<PRE>the Company's adoption of this Amendment No. 2, (ii) in the first Year in which</PRE>
<PRE>an individual becomes an Eligible Associate, the individual may deliver an</PRE>
<PRE>Election Agreement, with respect to any Excess Core Contribution(s) made</PRE>
<PRE>subsequent to filing of such Election Agreement, within 30 days after the</PRE>
<PRE>individual becomes an Eligible Associate and (iii) an Eligible Associate with
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<PRE>less than three Years of Service as of the date of an Excess Core Contribution</PRE>
<PRE>shall elect, or (in the absence of a properly filed Election Agreement) shall be</PRE>
<PRE>deemed to have elected, to defer all of his or her Unvested Excess Core</PRE>
<PRE>Contribution for a Year (and any Election Agreement to the contrary shall be</PRE>
<PRE>disregarded and treated as not properly filed hereunder).  An Eligible Associate</PRE>
<PRE>who defers Excess Core Contribution(s) pursuant to the terms of the Plan shall</PRE>
<PRE>be a Participant.  In order to be effective to revoke or modify an election to</PRE>
<PRE>defer Excess Core Contribution(s) for any particular Year, a revocation or</PRE>
<PRE>modification must be delivered prior to the beginning of the Year for which the</PRE>
<PRE>Excess Core Contribution(s) are made.</PRE>
<PRE>     5.  Amount Deferred; Period of Deferral.  A Participant shall designate on</PRE>
<PRE>the  Election Agreement the percentage or the dollar amount of his or her Excess</PRE>
<PRE>Core Contribution(s) that is to be deferred.  The applicable percentage(s) or</PRE>
<PRE>dollar amount(s) of Excess Core Contribution(s) shall be deferred until (i) the</PRE>
<PRE>date the Participant ceases to be an associate by death, retirement or otherwise</PRE>
<PRE>or (ii) the date otherwise specified by the Participant in the Election</PRE>
<PRE>Agreement, including a date determined by reference to the date the Participant</PRE>
<PRE>ceases to be an associate by death, retirement or otherwise; provided, however,</PRE>
<PRE>that with respect to the deferral of any Unvested Excess Core Contribution(s),</PRE>
<PRE>the period of deferral can end no sooner than the date on which the Eligible</PRE>
<PRE>Associate has achieved three Years of Service.</PRE>
<PRE>     6.  Accounts.  An Excess Core Contribution that a Participant defers under</PRE>
<PRE>this Plan shall be treated as if it was credited to an Account on the date the</PRE>
<PRE>Excess Core Contribution is made.  A separate Account shall be maintained with</PRE>
<PRE>respect to Vested Excess Core Contribution(s) and Unvested Excess Core</PRE>
<PRE>Contribution(s).  All accounts will be credited with interest computed quarterly</PRE>
<PRE>(based on calendar quarters) on the lowest balance in the Account during each</PRE>
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quarter at such rate and in such manner as determined from time to time by the</PRE>
<PRE>Committee.  Unless otherwise determined by the Committee, interest to be</PRE>
<PRE>credited hereunder shall be credited at the prime rate in effect according to</PRE>
<PRE>the Wall Street Journal on the last day of each calendar quarter plus one</PRE>
<PRE>percent.  Interest for a calendar quarter shall be credited to the Account as of</PRE>
<PRE>the first day of the following quarter.</PRE>
<PRE>     7.  Forefeiture of Accounts.  If as of the date of a Participant's</PRE>
<PRE>termination of employment the Participant has not achieved three Years of</PRE>
<PRE>Service (as defined in and determined under the Savings and Investment Pension</PRE>
<PRE>Plan), the Participant shall forfeit his or her Account relating to any Unvested</PRE>
<PRE>Excess Core Contribution(s), including any interest credited to such Account.</PRE>
<PRE>Notwithstanding the preceding sentence, a Participant shall not forfeit  his or</PRE>
<PRE>her Account relating to any Unvested Excess Core Contribtion(s) if the</PRE>
<PRE>Participant's termination of service is due to death, Disability (as defined in</PRE>
<PRE>the Savings and Investment Pension Plan) or Retirement (as defined in the</PRE>
<PRE>Savings and Investment Pension Plan).  Except as described above, a</PRE>
<PRE>Participant's Account(s) shall be nonforfeitable.</PRE>
<PRE>     8.  Payment of Accounts.  Unless forfeited pursuant to Section 7 of this</PRE>
<PRE>Article, the amount of a Participant's Account(s) attributable to Excess Core</PRE>
<PRE>Contribution(s) shall be paid to the Participant in a lump sum or in a number</PRE>
<PRE>of approximately equal quarterly installments, not to exceed 40, as designated</PRE>
<PRE>by the Participant in the Election Agreement.  The amount of such Account(s)</PRE>
<PRE>remaining unpaid shall continue to bear interest, as provided in Section 6 of</PRE>
<PRE>this Article.  The lump sum payment or the first quarterly installment, as the</PRE>
<PRE>case may be, shall be made as soon as practicable following the end of the</PRE>
<PRE>period of deferral as specified in Section 5 of this Article.
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<PRE>     9.  Failure to Timely File Election.  If in the case of a Vested Excess</PRE>
<PRE>Core Contribution an Eligible Associate fails to timely file an Election</PRE>
<PRE>Agreement, the Company within a reasonable period of time after the close of</PRE>
<PRE>the Year for which the Vested Excess Core Contribution was made shall pay to the</PRE>
<PRE>Eligible Associate in a lump sum an amount equal to the Vested Excess Core</PRE>
<PRE>Contribution without interest.  If in the case of an Unvested Core Contribution</PRE>
<PRE>an Eligible Associate fails to file properly an Election Agreement, the Eligible</PRE>
<PRE>Associate nevertheless shall be deemed as if the Eligible Associate had timely</PRE>
<PRE>filed an Election Agreement electing a lump sum payment to be made within a</PRE>
<PRE>reasonable time after the Eligible Associate has achieved three Years of</PRE>
<PRE>Service.</PRE>
<PRE>     10.  Death of a Participant.  In the event of the death of a Participant,</PRE>
<PRE>the amount of the Participant's Account(s) shall be paid to the Beneficiary or</PRE>
<PRE>Beneficiaries designated in writing by the Participant (the &quot;Beneficiary</PRE>
<PRE>Designation&quot;) in accordance with the Participant's Election Agreement and</PRE>
<PRE>Section 8 of this Article.  A Participant's Beneficiary Designation may be</PRE>
<PRE>changed at any time prior to his or her death by the execution and delivery of a</PRE>
<PRE>new Beneficiary Designation.  The Beneficiary Designation on file with the</PRE>
<PRE>Company that bears the latest date at the time of the Participant's death shall</PRE>
<PRE>govern.  In the absence of a Beneficiary Designation or the failure of any</PRE>
<PRE>Beneficiary to survive the Participant, the amount of the Participant's</PRE>
<PRE>Account(s) shall be paid to the Participant's estate in a lump sum 90 days after</PRE>
<PRE>the appointment of an executor or administrator.  In the event of the death of</PRE>
<PRE>the Beneficiary or Beneficiaries after the death of a Participant, the remaining</PRE>
<PRE>amount of the Account(s) shall be paid in a lump sum to the estate of the last</PRE>
<PRE>Beneficiary to receive payments 90 days after the appointment of an executor or</PRE>
<PRE>administrator.
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<PRE>     11.  Small Payments.  Notwithstanding the foregoing, if installment</PRE>
<PRE>payments elected by a Participant would result in a payment with a value of less</PRE>
<PRE>than $500, the entire amount of the Participant's Account(s) may at the</PRE>
<PRE>discretion of the Company be paid in a lump sum in accordance with Section 8 of</PRE>
<PRE>this Article.</PRE>
<PRE>     12.  Acceleration.  Notwithstanding the provisions of the foregoing, in the</PRE>
<PRE>event of an unforeseeable emergency, as defined in section 1.457-2(h)(4) and</PRE>
<PRE>(5) of the Income Tax Regulations, that is caused by an event beyond the control</PRE>
<PRE>of the Participant or Beneficiary and that would result in severe financial</PRE>
<PRE>hardship to the individual if acceleration were not permitted, the Committee may</PRE>
<PRE>in its sole discretion accelerate the payment to the Participant or Beneficiary</PRE>
<PRE>of the amount of his or her Account(s), but only up to the amount necessary to</PRE>
<PRE>meet the emergency.
</PRE>
<PRE>     Executed as of the _____ day of __________, 2003.
</PRE>
<PRE>                                                THE TIMKEN COMPANY



</PRE>
<PRE>                                                By:  ___________________________
                                                Name:  _________________________
                                                Title:  ________________________




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