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                                      exhibit 10h

                                 Twin Disc, Incorporated
                    Twinco Salaried Employees Short Term Incentive Plan
                                         FY 2004



     (1)   PURUPOSE:  The purpose of this Corporate Incentive Plan is to
motivate salaried employees to grow the earnings and to efficiently utilize the
assets of the Corporation. The ultimate aim is to increase Shareholder Value by
achieving returns which are greater than the cost of capital off the
Corporation.

     (2)   ELIGIBILITY FOR PARTICIPATION:  Participants will be all the salaried
employees of the Twinco Operations.

     (3)   ELIGIBILITY FOR INCENTIVE BONUS PAYMENT:  Participants must be
employed at the end of the Bonus Year in order to receive an Incentive Bonus.
However, the Incentive Bonus will be prorated and paid to a Participant who
dies, is disabled or retires during a Bonus Year. The proration will be based
on the period of actual employment and earnings during that period. A
Participant whose employment is terminated for any other reason prior to the end
of a Bonus Year will not be entitled to an Incentive Bonus for that Bonus Year.

     (4)   INCENTIVE AWARD DETERMINATION:  The Twinco Salary Incentive Plan will
be based on one criterion:

           *   Achievement of Target RONAE as contained in the Annual Business
               Plan approved by the Board of Directors.

The approved Target RONAE for the current year is listed in Exhibit A.

     (5)   PAYOUT RANGE:  The payout range is recommended annually by the
President-Chief Operation Officer for the approval of the Chairman-Chief
Executive Officer and the Executive Selection & Salary Committee of the Board
of Directors.

     (6)   DEFINITIONS:

     RETURN ON NET ASSETS EMPLOYED (RONAE):  Operating Income divided by Average
Net Assets Employed (Average NAE).

     OPERATING INCOME:   Operating Income as reported in the audited,
consolidated financial statements of the Company prior to accrual for the
Incentive Bonus.

     NET ASSETS EMPLOYED (NAE):Balance sheet footing of total assets plus any
reserve for LIFO valuation of inventory, less:

     - cash and cash equivalents; and
     - all non-interest bearing liabilities, regardless of maturity, with
       the exception of;
     - accrued interest
     - accruals for Incentive Bonuses
     - dividends payable

     AVERAGE NAE:   Thirteen (13) point average of NAE at the end of each month
starting with the last day of the previous Bonus Year and ending with the last
day of the current Bonus Year.

     (7)   ADMINISTRATIVE GUIDELINES:  Unless the Executive Selection & Salary
Committee of the Board of Directors decides otherwise:

     - Losses resulting from bad debts, inventory write-downs, plant closures,
       or similar adjustments to asset values will be reflected in Operating
       Income and NAE from the date of adjustment.
     - Adjustments or material transactions not in the ordinary course of
       business, e.g., compliance with changes in accounting standards,
       litigation awards or settlements, insurance recoveries, transaction
       costs incurred in the acquisition or sale of a business unit, etc.,
       will be excluded from the determination of Operating Income.
     - New acquisitions will be included in the determination of Operating
       Income and NAE for the date of acquisition.
     - Discontinued operations and divestitures will be included in the
       determination of Operating Income and NAE until the date of disposal;
       and
     - Gains or losses on the sale of subsidiaries, divisions or business units,
       whether by sale of assets, stock or other securities, will be excluded
       from the determination of Operating Income.

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     (8)   INDIVIDUAL SALARY BASE:  The Participant's total salary compensation
for the Bonus Year:

     - Plus any salary deferred under an 401(k) plan;
     - Less any Incentive payments and other payments made in lieu of benefits.

     (9)   INCENTIVE YEAR:  The Company's fiscal year.

    (10)   PAYOUT DATE:Established by the Executive Selection & Salary Committee
of the Board of Directors but typically annually within four weeks after the
Board's acceptance of the Company's annual audit report.

    (11)   WITHOLDING TAXES:  The Company shall deduct from all Incentive Bonus
payments made under this program all taxes required by law to be withheld.

    (12)   EMPLOYMENT NOT GUARNTEED:Neither this Incentive Bonus Program nor
any action taken hereunder shall be construed as giving any Participant a right
to remain as an employee of the Company at any time or for any period.

    (13)   CONSTRUCTION:  This Incentive Bonus Program shall be construed
according the laws of the State of Wisconsin.

    (14)   AMENDMENT OR TERMINATION:  The Board of Directors of the Company
may, without prior notice, amend or terminate this Incentive Bonus Program at
any time.