PERFORMANCE STOCK UNIT AWARD
GRANT AGREEMENT
THIS PERFORMANCE STOCK UNIT AWARD GRANT
AGREEMENT (the “Agreement”), by and between TWIN DISC,
INCORPORATED (the “Company”) and
___________________________ (the “Employee”) is dated
as of the 24 th day of July, 2008, to memorialize an
award of performance stock units of even date herewith.
WHEREAS, the Company adopted a Long Term
Incentive Compensation Plan in 2004, as amended in 2006 (the
“Plan”), whereby the Compensation Committee of the
Board of Directors (the “Committee”) is authorized to
grant awards of various types to certain key employees of the
Company; and WHEREAS the Company amended the Plan on January 20,
2006, to authorize the award of performance stock units, which
entitle an employee of the Company receiving such an award to a
cash payment equal to the value of the common stock of the Company
if the Company achieves a predetermined performance objective; and
WHEREAS, effective July 24, 2008, the Committee made an award of
performance stock units to the Employee 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 Unit 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 has granted Employee an award of performance stock units
effective July 24, 2008. Such performance stock units entitle the
Employee to receive a cash payment equal to the product of the
number of units awarded pursuant to the table below, multiplied by
the fair market value of
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the
Company’s common stock as of June 30, 2011, if the Company
achieves the economic profit objective stated below (the
“Performance Objective”):
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Cumulative Economic Profit
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Number of Performance
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Stock Units
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Maximum
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$XX
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XXXX
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Target
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$XX
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XXXX
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Threshold
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$XX
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XXXX
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The Performance Objective is the amount of the
Company’s economic profit (measured as the difference between
the Company’s cumulative net operating profit after taxes and
the Company’s cumulative capital charge) for the cumulative
three fiscal year period ending June 30, 2011, as specified in the
table above. If the Company achieves the maximum Performance
Objective as specified on the table above, the Employee will earn
the maximum number of performance stock units. If the Company
achieves the target Performance Objective as specified on the table
above, the Employee will receive the target number of performance
stock units. If the Company achieves the threshold Performance
Objective stated above, the Employee will earn the threshold number
of performance stock units. No performance stock units will be
earned for performance below the 3-year cumulative economic profit
threshold and no additional performance stock units will be earned
for performance exceeding the 3-year cumulative economic profit
maximum. In the event that the Company’s economic profit is
between the achievement levels set forth in the above table, the
number of performance stock units awarded shall be determined by
interpolation. The Committee shall certify whether and to what
extent such Performance Objective is satisfied before any payment
pursuant to a performance stock unit is made. Such certification,
and payments pursuant to such certification, shall be made within
2½ months after June 30, 2011.
2. Price Paid by Employee . The price to
be paid by the Employee for the performance stock units granted
shall be No Dollars ($ 0.00 ) per share.
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3. Voluntary Termination of
Employment Prior to Retirement/Termination for Cause . If prior
to attaining the Performance Objective the Employee voluntarily
terminates employment prior to the Employee becoming eligible for
normal or early retirement under the Company’s defined
benefit pension plan covering the Employee or the employment of the
Employee is terminated for cause, the performance stock units
granted to the Employee shall be forfeited. The Committee shall
conclusively determine whether the Employee was terminated for
cause for purposes of this performance stock unit award.
4. Termination of Employment due to Death or
Disability . If prior to attaining t
