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exhibit 10b
1988 NON-QUALIFIED STOCK OPTION PLAND FOR
OFFICERS, KEY EMPLOYEES, AND DIRECTORS
OF TWIN DISC, INCORPORATED
1. PURPOSE. The purpose of this stock option plan (hereinafter called
"Plan") is to secure for Twin Disc, Incorporated (hereinafter called "Company")
the benefits which result from providing present or future officers,
key employees, and directors of the Company with the performance incentives
inherent in common stock ownership. This Plan is expected to benefit the
Company's shareholders by enabling the Company to attract and retain qualified
individuals to serve as its officers, key employees, and directors, to provide
incentive compensation to such individuals, and to encourage such individuals
to acquire or increase their proprietary interests in the Company.
2. STOCK. The total number of shares of common stock to be subject to
options upon the exercise of options granted under this Plan will not exceed
75,000 shares of the Company's common stock, subject to adjustment as provided
in Paragraph 8(a) hereof. Such shares may be authorized and unissued shares of
common stock, or issued shares of common stock which have been reacquired by
the Company, or a combination thereof. Shares subject to an option under this
Plan which is not exercised in full, or shares as to which the right to
purchase is forfeited through default or otherwise, shall remain available for
other options under this Plan.
3. ELIGIBILITY. An option may be granted to any officer, key employee,
or director of the Company (hereinafter called "Eligible Participant").
4. ADMINISTRATION.
(a) This Plan will be administered by the Salary and Selection
Committee of the Company's Board of Directors (hereinafter called
"Committee").
(b) A majority of the Committee shall constitute a quorum, and
acts of majority present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee shall be
deemed the acts of the Committee.
(c) The Committee shall select one of its members as Chairman. The
Committee shall appoint a Secretary, who shall maintain a record of
its actions, decisions and proceedings. The Committee shall have the
authority to grant options, and subject to the express provisions of
this Plan:
(1) Determine the number of shares subject to each option and
the terms thereof;
(2) Prescribe rules and regulations from time to time for
administration of this Plan;
(3) Decide any questions arising as to the interpretation or
application of any provision of this Plan
(d) No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.
5. OPTION PRICE. Each option shall state the option price, which shall
be not less than the fair market value of such stock at the date of grant of the
option. The fair market value of the stock at the date of grant shall be the
closing price of the stock on the business day preceding the date of grant on
the principal stock exchange on which the Company's stock is then listed.
6. TERMS OF OPTION. Options shall be exercisable upon the terms and
conditions set forth below. Each option granted under this Plan shall be
evidenced by an agreement between the Company and the optionee (hereinafter
called "Participant") and shall contain, in such form and with such other
provisions as the Committee shall from time to time approve and determine,
provisions to the following effect:
(a) An option shall be nontransferable and may be exercised only
by the participant during the Participant's lifetime. A Participant
shall have the right upon his death to transfer options granted to
him, either by will or under the law of intestate succession, subject
to the provisions of Paragraph 6(b)(2) hereof.
(b)
(1) If a Participant's employment or retention by the Company
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is terminated for any reason other than death or disability, the
Participant may, within the ninety (90) days after terminations,
exercise any rights under any option theretofore granted to the
Participant which the Participant would have been entitled to
exercise on the date of such termination.
(2) If a Participant's employment or retention by the Company
is terminated by death, the person or persons to whom any option
theretofore granted to the Participant passes, pursuant to his
will or under the laws of intestate succession, may exercise any
rights under any option theretofore granted to the Participant
which the Participant would have been entitled to exercise on the
date of his death, but such exercise must be made within one year
of the death of the Participant. If the termination is due to
disability, the Participant may exercise the option within one
(1) year from the date of such termination.
(3) To the extent any option has not yet become exercisable on
the date a Participant's employment or retention is terminated,
such option shall automatically terminate.
(c) An option must be exercised within ten (10) years of its grant.
(d) An option shall be exercised by delivering to the Chief
Financial Officer of the Company at its principal business office a
written notice designating the number of shares for which it is being
exercised. Payment in full for the number of shares for which the
option is being exercised must accompany such notice.
(e) A Participant shall pay to the Company, upon its demand, such
sums as may be requested by the Company for the purpose of satisfying
its liability to withhold federal, state or local income or other
taxes occurred by reason of the exercise of an option or the transfer
of shares upon such exercise.
7. SHARES ACQUIRED ON EXERCISE OF OPTION.
(a) At the time of exercise, unless the shares acquired are the
subject of an effective registration statement, a Participant shall
be required to give a written representation that he is acquiring
such shares for his own account and for purposes of investment, and
not with a view to, or for sale in connection with, the distribution
of such shares, nor with any present intention of distributing such
shares. The Participant shall further acknowledge his understanding
that such shares are not registered under the Securities Act of 1933,
as amended, on the ground that the issuance of shares pursuant to
the exercise of an option granted pursuant to this Plan is exempt
from registration as not involving any public offering, and that the
Company's reliance on such exemption is in part based on the foregoing
representation. The Participant shall further agree that he will not
sell or transfer any shares purchased through exercise of an option
until a registration statement covering the shares is effective, or
until he receives an opinion by the Company's counsel that a proposed
sale or transfer will not violate the Securities Act of 1933, as
amended, or until he obtains a no-action letter from the Securities
Exchange Commission with respect thereto.
(b) Unless shares acquired are covered by an effective registration
statement, their certificates shall bear an appropriate legend
restricting their transfer.
8. MISCELLANEOUS.
(a) In the event of any stock dividend, subdivision, stock split,
combination of shares, reclassification, recapitalization, or if the
Company shall participate in a merger or consolidation in which the
Company is the surviving corporation, or if other similar change in
the capitalization of the Company occurs affecting its common stock,
the Committee shall make corresponding adjustments in (1) the number
of shares and the price per share applicable to the outstanding
options, (2) the number of shares then reserved for award under
options thereafter to be granted, and (3) applicable limitations set
forth in this Plan with respect to the granting of options.
(b) No fractional shares of stock shall be issued upon the exercise
of any option and the Company shall not be under any obligation to
compensate any Participant for fractional shares.
(c) This Plan does not impose on the Company an obligation to
continue the employment or retention of any Participant or Eligible
Participant.
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(d) No Participant shall have any rights as a shareholder of the
Company with respect to any shares for which he has an option to
purchase until issuance to him of a certificate representing such
shares.
9. EFFECTIVE DATE OF PLAN. This Plan shall become effective upon the
later of the date of adoption by the Board of Directors of the Company or the
date of ratification by the Company's shareholders, subject to compliance with
all applicable laws.
10. TERM OF PLAN. Options may be granted pursuant to this Plan from time
to time within a period of ten (10) years form the effective date of the Plan.