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PERFORMANCE STOCK AWARD GRANT AGREEMENT
THIS PERFORMANCE STOCK AWARD GRANT AGREEMENT (the "Agreement"), by and
between TWIN DISC, INCORPORATED (the "Company") and ___________________________
(the "Employee") is dated this 15th day of October 2004, to memorialize an
award of performance stock of even date herewith.
WHEREAS, the Company adopted an Incentive Compensation Plan in 1998 (the
"Plan") whereby the Compensation Committee of the Board of Directors (the
"Committee") is authorized to grant performance stock awards that entitle an
employee of the Company receiving such award to shares of common stock of the
Company if the Company achieves a predetermined performance objective; and
WHEREAS, the Committee has determined it to be in its best interests of the
Company to grant the Employee a performance stock award as an inducement to
achieve the below described performance objective.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements herein set forth, the parties hereto agree as follows:
1. Performance Stock Award Grant. Subject to the terms of the Plan, a copy
of which has been provided to the Employee and is incorporated herein by
reference, the Company hereby grants Employee a performance stock award, such
performance stock award shall entitle the Employee to receive ________ shares
of the Company's common stock (the "Shares") if the Company achieves __________
($_____________) in consolidated annual revenue in the fiscal year beginning on
July 1, 2006 and ending on June 30, 2007 (the "Performance Objective"), subject
to the terms and conditions and restrictions set forth below.
2. Price Paid by Employee. The price to be paid by the Employee for the
shares granted shall be No Dollars ($ 0.00) per share.
3. Termination of Employment. If the employment of the Employee shall
terminate prior to attaining the Performance Objective, the performance stock
awards granted shall be forfeited.
4. Death/Disability. If the Employee dies or becomes permanently disabled
prior to attaining the Performance Objective, the performance stock awards
granted shall be forfeited. The Committee shall conclusively determine whether
an Employee shall be considered permanently disabled for purposes of this
performance stock award.
5. Change of Control. Notwithstanding Sections 3 and 4 above, if an event
constituting a Change in Control of the Company occurs and the Employee
thereafter terminates employment for any reason, then the performance stock
award granted hereunder shall immediately vest and the Shares of the Company
underlying the award shall be delivered as if the Performance Objective had
been fully achieved, regardless of whether termination of employment is by the
Employee, the Company or otherwise. Employee's continued employment with the
Company, for whatever duration, following a Change in Control of the Company
shall not constitute a waiver of the Employee's rights with respect to this
Section 5.
For purposes of this Section 5, a "Change in Control of the Company" shall
be deemed to occur in any of the following circumstances:
(a) if there occurs a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") whether or not the Company is then subject to such
reporting requirement;
(b) if any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) other than Michael Batten or any member of his family (the "Batten
Family"), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing thirty percent (30%) or more of the combined voting
power of the Company's then outstanding securities;
(c) if during any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement) there shall cease to be
a majority of the Board comprised as follows: individuals who at the
beginning of such period constitute the Board and any new director(s)
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved; or
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(d) if the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
6. No Rights of Shareholder. Until the Performance Objective is met, the
performance stock award grant shall not entitle the Employee any rights of a
shareholder, including the right to receive dividends or to vote the Shares. In
the event that the Performance Objective is met, the Shares of the Company
shall be issued to the Employee whose performance stock award has not been
forfeited, and a certificate representing the Shares shall be delivered to the
Employee.
7. Employment Status. Neither this Agreement nor the Plan impose on the
Company any obligation to continue the employment of the Employee.
TWIN DISC, INCORPORATED
By:______________________________
Its:_____________________________
EMPLOYEE:
_________________________________